As the
healthcare bill becomes a law today, what does this mean for you as a small
business owner? Here is a breakdown on
what small business owners can expect with this landmark healthcare reform bill.
Small Business Health Options
Programs aka SHOP Exchanges. By 2014 states
will set up SHOP Exchanges where small businesses will be able to buy insurance
together in an effort to alleviate insurance costs.
Tax Credits. Until SHOP Exchanges are in place, businesses
with 10 or fewer full time employees earning less than $25,000/year will be
eligible for a tax credit of 35% of health insurance costs. Businesses with 11 and 25 employees and an average
salary of $50,000 may qualify for partial credits.
Pre-Existing Conditions Don’t
Matter. In 2014
insurers can no longer set rates or exclude coverage based on pre-existing conditions.
Premiums will only be able to vary based on location, age, and tobacco use.
Happening
immediately—a ban on lifetime limits on healthcare coverage and the canceling of
policies that have already been issued, except of course in cases of
fraud.
Don’t Offer Coverage and Face a Penalty. Beginning in 2014, organizations with more
than 50 employees will be required to either offer healthcare coverage or pay a
penalty of $750/year/full time employee.
Coverage will need to meet minimum benefits or additional penalties will
be enforced.
“Cadillac” plans will be taxed.
“Cadillac” plans that cost more than $10,200/year for individuals or
$27,000 for family coverage are subject to a 40% tax on the portion of the cost
that surpasses the maximum. Although
this tax will be paid by insurers, it’s predicted that premiums will be
increased for plan holders as a result.
As for the several changes on the way—that will alter how small business owners purchase and provide health insurance for themselves and their employees—many of these plans will not take place until the year 2014 or beyond. Additionally there will most likely be amendments that bring about further provisions from the Senate, so these terms (at least for the time being) are not set in stone, but they are still certainly something to think about.
