What Healthcare Reform Means for Your Small Business
Topic: Business Management,News,Politics | Comments Off
After much debate and uncertainty, the Affordable Care Act was finally upheld. The Supreme Courts decision means that millions of uninsured americans will now qualify for government-subsidized care. This is great news for many, but what are the ramifications for your small business? The Wall Street Journal does an excellent job of outlining how the decision will affect your business.
The article explains that, for sole proprietors, the impact will be much like that on individuals. You, as a one-person business, would buy insurance through your state’s benefits exchange that will roll out in 2014. The thing to note here is the individual mandate. For sole proprietors (and all individuals), the fee for not having insurance is $695 or 2.5% of income–whichever is greater.
The article also discusses tax credits for business with 10 employees or less, earning an average of $25,000 or less. Since 2010, the full credit is 35% of your contribution toward an employee’s insurance premium. As your firm size and average wage amount goes up, the tax credit goes down. And once your business hits 25 full-time employees or $50,000 in average salaries, the credit is completely phased out. In 2014, the state-based Small Business Health Options Program Exchanges will be open to small firms. And getting insurance through those exchanges could bump the maximum tax credit to 50% of your contribution.
However, you don’t have to provide your employees with health insurance, especially if you have fewer than 50 employees. Though, once your firm reaches 50 full-time equivalent employees, a penalty will kick in if you fail to provide coverage for employees who average 30 or more hours a week in a given month. The penalty is $2,000 for each full-time employee.
Check out the rest of the article to make sure your small business is prepared for the changes ahead!
-The Working Point Team