Don’t Let Your Small Business Get lost in Healthcare Hoopla

Last month the Supreme Court upheld the Affordable Care Act. Still, states and advocacy organizations are fretting over the new regulation making it is easy for us to get caught up in the rhetoric, and lose sight of what’s important to our business.

Regardless of how you feel about the fact, the Affordable Care Act passed and is here. Some people say that Health Care reform will be a blow to small business development, job growth, and the national deficit while others say nearly the opposite. It’s time to ignore the politics and dig into the nitty gritty details to find out what the implications are.

Question: Will You Be Required To Pay For Your Employee’s Health Insurance?
Beginning in 2014, the Employer Responsibility provision will require companies with more than 50 full-time workers to purchase a health care plan for their employees or face the penalties. However, businesses that have less than 50 full-time employees are exempt from the Employer Responsibility Provision. Businesses that fall under this category are NOT required to pay for their employee’s health insurance. Most of us fall under this category so if you can’t afford paying any of your employees health care, you won’t have to.

If you are already offering your employees health insurance, your program will be “grandfathered in” providing your plan doesn’t dramatically decrease benefits or increase out-of-pocket spending for consumers. And you may also qualify for a small business tax credit.

If you’re thinking of purchasing a health care plan, In 2014 the state-based Small Business Health Options Program Exchanged (SHOP) will be open to businesses with 100 employees or less. The exchanges will be designed to offer small employers an easier way to compare and purchase plans. Besides the costs, offering benefits to your employees will discourage turnover, increase employee satisfaction, and create a healthier workforce. Maybe its worth it at your business?

Question: Can You Claim The Tax Credit? Who Qualifies?

Since 2010 small business employers with 25 employees or less have qualified if their employees’ average annual wages are below $50,000, and if the business covers at least half the cost of health insurance for each employee. Currently the maximum credit you can receive is 35% of your contribution toward your employee’s insurance premium.

Your business is only eligible for the full credit of 35% if you have fewer than 10 full-time employees that average salaries less than $25,000.

Starting in 2014, the credit will increase to 50% for qualifying businesses. But unfortunately, the tax credits won’t last forever. The credit is only available for maximum of five years and only two years once the SHOP exchanges are up and running in 2014.

To find out more information on the small business tax credit, click here.

Want to know if your business qualifies? Try this guide from irs.gov.

To calculate the possible credit available to your business, use this form.

Question: How Much Will I Have To Spend On Health Insurance?

The cost of health insurance widely depends on the type, size and location of your business. Policies that have more comprehensive coverage cost more. States vary on what they require insurers to cover. Contact your State Department of Insurance for more information.

Starting in 2014, health insurers won’t be allowed to charge you more based on your employees health status, pregnancy or disability and they must accept everyone in your group. Health insurers must make available to you any small employer health plan they sell to other small employers in your state. It’s up to you to decide how much of your employee’s premiums to pay.

Have any other questions? Let us know and we’ll get back to you.