The following is a guest post by Martin Roth. Martin currently works in business development for Benefit Administration Group, a local benefits and HR technology consultancy. Martin co-founded Giftmeo with Michael Angle. He also curates contemporarymasculine.
The 2012 Presidential Election is in the books, and ole’ Barry is back in office for another four years. So what does this mean for small businesses?
Quite the hot-button topic, the Patient Protection and Affordable Care Act (PPACA), or more commonly “Obamacare”, presents some interesting issues (and potential opportunities) for start-ups and small businesses across the country.
The changes that will take place revolve around 5 key points:
- Guaranteed Issue requires health care providers to issue coverage regardless of medical condition (say goodbye to pre-existing conditions!). Health care providers will only be able to discriminate based on age and tobacco use, and medical underwriting will beobsolete.
- Individual Mandate requires all US citizens not covered by an employer or public- sponsored health plan to either purchase health coverage or pay a penalty.
- Each state will offer health insurance exchanges where individuals and small businesses can compare policies and premiums and purchase online
- Pay or Play – The business world will be divided into two sections: businesses with less than 50 employees, and businesses with 50 or more employees. Those with 50 or more employees must provide health coverage foryour employees, or they will pay a penalty. Those with less than 50 employees are not legally required to provide any health care support for their employees.
- Low income individuals (100%-400% of the Federal Poverty Level) will qualify for federal subsidies to fund individual premiums.
So how does this affect start-ups and small businesses? With these new regulations comes some relief for small employers (we are looking at you, start-ups).
There exists a Small Business Health Care Tax Credit that allows small businesses to save up to 35% and charities to save up to 25% on employee health care premiums (this will go up to 50% and 35%, respectively, on January 1, 2014). The amount of the credit is based on a sliding scale dependent upon the number of employees and the average salary of those employees.
This means if you qualify for a 15% tax credit and you are currently paying $30,000 a year in health care premium expenses ($2,500/month), you will save $4,500 annually via tax credit! That kind on change will make for a pretty sweet employee appreciation Christmas bash if you ask me.
Click here to read about eligibility for the Tax Credit.
Click here to see more examples of how the credit applies.
If you want help submitting your claim, or if you have any questions regarding Health Care Reform or Health Insurance, email me at email@example.com.