Health care reform is here! It’s time to bite the bullet and understand what the ACA means to small business. This blog will highlight some of the major facts. Two links are provided to more complete information.
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•Tax credits
In 2014, the tax credit for small businesses that contribute 50% or more to employee-only health insurance premiums increases from 35% to 50% for those participating in SHOPs (see below).
•Small business health options program (SHOP)
These SHOPs offer small businesses increased purchasing power by joining with other small businesses to create a larger pool. Risks are lowered due to a larger base to even out costs. Open enrollment begins October 1, 2013.
•Disclosure rules
Employers are required to provide employees with “Summary of Benefits and Coverage” explaining coverage and costs.
•90-Day maximum waiting period
Effective January 1, 2014, employees eligible for employer-provided health coverage will not have to wait more than 90 days.
•Flexible spending account Contributions
Plan years beginning on or after January 1, 2013, are now capped at $2500.
•Additional medicare withholding
Beginning January 1, 2013, the employee portion of Medicare Part A increases to 2.35% for employees with incomes over $200,000; employer’s portion is unchanged.
•Workplace wellness Programs
Effective January 1, 2014, the maximum reward increases to 30% of the costs of health coverage.
•Medical loss ratio Rebates
Insurance companies must spend at least 80% of premium dollars on medical care rather than administrative costs or provide rebates to policyholders.
•Business size
Rules change based on business employee size; less than 25, less than 50, less than 75, or self-employed. Understand the rules for your business size.
Wow, that’s just the tip of the iceberg. Start preparing your business for impacts of ACA. I don’t have all the answers, but send me your questions and I will try to help you.
For more information, here are two places to go:
SBA: http://www.sba.gov/healthcare
US Government: www.whitehouse.gov/healthreform
AND…follow me on Twitter @smallbizlaura
Thanks for sharing this informative article! I also think that many small business owners can find themselves in hot water if they don’t take the necessary precautions when it comes to taxes. I once had a friend who faced serious IRS repercussions because his one of his regional managers had not been sending in their invoices for employee payouts on a monthly basis. He was able to get some of the penalty charges taken away, and needless to say that manager was fired. However, these scenarios can often have very dire consequences especially for small businesses where owners could be more liable.