Re: What Health Care Reform Means for Small Business - now and later [1 Attachment]

[Guest guest]



I wonder how this will work for employees that have insurance on their spouses plan and prefer to keep that. So how will that work?

What Health Care Reform Means for Small Business - now and later [1 Attachment]

Attached and below is a good summary for small business…

http://www.smallbusinessmajority.org/_pdf/Small_biz_tax_credit_fact_sheet_wh32410.pdf

Broad Eligibility. The Council of Economic Advisors estimates that 4 million small businesses are

eligible for the credit if they provide health care to their workers. Qualifying firms must have less than

the equivalent of 25 fullâ€time workers (e.g., a firm with fewer than 50 halfâ€time workers would be

eligible), pay average annual wages below $50,000, and cover at least 50 percent of the cost of health

care coverage for their workers.

• Substantial Benefit. The credit is worth up to 35 percent of a small business’s premium costs in 2010.

On January 1, 2014, this rate increases to 50 percent.

• Firms Can Claim Credit for Up to 6 Years. Firms can claim the credit for 2010 through 2013 and for any

two years after that.

• Nonâ€Profits Eligible. Taxâ€exempt organizations are eligible for a 25 percent refundable tax credit in

2010. In 2014, this rate increases to 35 percent.1

• Gradual Phaseâ€Outs. The credit phases out gradually for firms with average wages between $25,000

and $50,000 and for firms with the equivalent of between 10 and 25 fullâ€time workers.

• Premium Cost Eligibility. To avoid an incentive to choose a highâ€cost plan, an employer’s eligible

contribution is limited to the average cost of health insurance in that state.

==================================================

$25,000/year at 50 weeks of work and 40 hours/week = $12.50/hour

Due to cost of living – all of our employees where we live are paid over this $12.50/hour level.

Plus I don’t quite understand where I fit in…

--------------------------------------------------------------------------

•Provides tax credits to small businesses that pay at least 50 percent of premiums. Businesses with 10 or fewer employees earning less than $25,000 would get a 35 percent tax credit on health insurance costs; those employing 11 to 25 employees earning on average up to $50,000 would get partial credits.

------------------------------------------------------------------------

I have <10 employees (not 11-25), but my employees make less than $50k

I fit in the <10 employee category, but not the <$25k.

I fit in the <$50k category for employees, but not the 11-25 employees.

So am I out of luck for the tax credit?

Plus I already pay $350/month/employee toward healthcare insurance – does that count toward their salary for the year?

-----------------------------------------------------------------------------

I’m guessing I might actually be eligible for this despite my confusion on the wording.

At least for a partial credit of some type.

It also make me wonder – if I get a 35% credit – I could theoretically increase my $350/month to $472/month and basically not lose any money from my current situation because I will be getting a tax credit to make up for the extra amount.

Am I missing something?

How does the current $350/month count on my taxes?Is that a business expense already – are they taking that business expense away and changing it to the 35% credit above?

Or is the 35% credit in addition to the ability to write off the $350/month as a business expense?

I’m confused, but I guess this will sort out over time.

===========================================

http://www.inmaricopa.com/NEWS/NewsArticleDetails.aspx?mid1=430 & & ArticleID=7940

Numbers released recently from the Agency for Healthcare Research and Quality show of the 63,700 small businesses in Arizona, 70 percent cannot afford or choose not to offer health-care options to their employees.

Snip

Last Tuesday President Barack Obama signed the Patient Protection and Affordable Care Act, and a series of fixer bills aimed at overhauling the U.S. health-care system over the next 10 years.

The bill would require employers who have more than 50 full-time employees to offer coverage to full-time employees by 2014 or pay a $2,000 penalty per employee after the first 30, if at least one of their employees receives a tax credit.

Yet, according to data from the White House Council of Economic Advisers, 96 percent of those already offer health insurance. However, employers with less than 50 full-time employees, which make up 5.78 million out of 6.02 million U.S. businesses, would be exempt.

To encourage these companies to offer insurance, the government is starting by rolling out two programs this year; one that rebates companies 35 percent of the coverage they pay, and a second that offers grant money to institute prevention programming.

Snip

The 35 percent cap on rebates would rise to 50 percent in 2014. At that time, states will have to have in place Small Business Health Options Programs, or SHOP exchanges, in which small businesses will be able to pool together to buy insurance.

================================

http://www.businesspundit.com/what-health-care-reform-means-for-small-business/

Who gets the most tax credits? Very small companies (10 or fewer employees) with low-wage workers.

Starting this year:

You can get a 35% tax credit if you have 10 or fewer employees, and they earn less than $25,000 on average.

You qualify for a smaller tax credit if you have 25 or fewer employees with an average wage $50,000 or less.

You don’t get a tax credit if you have more than 25 employees. Also, any employee who earns more than $80,000/year will be excluded from your credit

..

Starting in 2014:

States must set up health insurance pools called SHOP exchanges (Small Business Health Options Programs). These allow small businesses to group together to buy health insurance.

You could receive a 50% tax credit if you’re a company with 10 or fewer employees who earn less than $25,000 on average.

You will be penalized $750 per full-time employee if you’re a company with 50 or more employees, and you don’t provide health insurance. The government won’t charge you for the first 30 workers you don’t cover.

You will not be penalized if you have fewer than 50 employees.

You face additional fines if you don’t cover 60% of overall employee health costs, as well government-defined set of services.If you pay more than $10,200 per year for your individual employee’s health coverage, or more than $27,500 for family health coverage, the government will charge your insurer a 40% excise tax on the portion you pay that exceeds the amounts above. That means higher premiums for you–or your employees. Dental and vision isn’t included in the tax.

How much do you have to cover?

If you offer your employees health insurance:

* You must cover no less than 72.5% of the cheapest health plan

you offer for individuals, and no less than 65% for families.* You must automically enroll every employee in a health plan with the lowest employee premium, unless they opt out.If you choose not to provide health coverage:

*You must pay the Health Choices Commissioner (the person in charge of the SHOP exchange fund) 8% of the average wages paid during a predefined period of enrollment. They charge you a lower percentage if your annual payroll is less than $400,000.They bust you if:

*You don’t cover your employees and don’t pay your SHOP fee. You’re fined $100 per violation day.*You try to entice a high-risk (sick) employee away from company-provided insurance and towards the SHOP to try to save yourself money.

Also note:

If you operate as a partnership, each partner counts as an employee.

There are a few House amendments that the Senate may pass this Sunday. If they pass, it means that:

-The penalty for not providing insurance will go up to $2,000.-Part-time employees will count towards that 50 employee limit.-If you buy your employees “Cadillac†coverage, you won’t face that 40% tax until 2019.

=======================================

http://cs.sbtv.com/Post/?id=2922

•Provides tax credits to small businesses that pay at least 50 percent of premiums. Businesses with 10 or fewer employees earning less than $25,000 would get a 35 percent tax credit on health insurance costs; those employing 11 to 25 employees earning on average up to $50,000 would get partial credits.

=======================================

http://money.cnn.com/2010/03/22/smallbusiness/small_business_health_reform/index.htm

For small businesses, the effects of the now-passed health reform law include:

* By no later than 2014, states will have to set up Small Business Health Options Programs, or "SHOP Exchanges," where small businesses will be able to pool together to buy insurance. ("Small businesses" are defined as those with no more than 100 employees, though states have the option of limiting pools to companies with 50 or fewer employees through 2016; companies that grow beyond the size limit will also be grandfathered in.)

The Congressional Budget Office has estimated that the exchanges would ease small business insurance costs, albeit only marginally: premiums in the small-group market are forecast to fall between 1% and 4% under the exchanges, while the amount of coverage would rise by up to 3%.

* For the next four years, until the SHOP Exchanges are set up, businesses with 10 or fewer full-time-equivalent employees earning less than $25,000 a year on average will be eligible for a tax credit of 35% of health insurance costs. (Companies with between 11 and 25 workers and an average wage of up to $50,000 are eligible for partial credits.)

The tax credit will remain in place, increasing to 50% of costs, for the first two years a company buys insurance through its state exchange. The Congressional Budget Office predicts that the tax credit will affect about 12% of individuals covered via the small-group insurance market, lowering their cost of insurance by between 8% and 11%.

* Insurers will no longer be able to set rates or exclude coverage based on pre-existing conditions, and can vary premiums only by geographic location, age, and tobacco use.

These restrictions, however, would not kick in until 2014. Going into effect immediately: a ban on lifetime limits on coverage, and on "rescission" (canceling policies already issued) except in cases of fraud

==================================================

http://www.fwbusinesspress.com/display.php?id=12252

The immediate tax credit promised by the president is for small businesses with fewer than 25 employees whose average annual wage is $50,000 and who contribute at least 50 percent of total premium costs for their employees’ health insurance. The tax credit operates on a sliding scale, with a full credit being 35 percent of employees’ premiums for businesses with 10 or fewer employees and average annual wages of $25,000.

===================================

Locke, MD