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With full implementation just over seven months away, many small-business owners are confused about what the new healthcare law means for their business and their bottom line.  Small businesses already offering healthcare coverage want to know if they can keep their coverage as is, or if they need to make changes under the new law, while those businesses not offering any type of insurance benefits seem to be floundering in a sea of befuddlement.  Here is a breakdown of the major questions plaguing entrepreneurs.

Which Businesses Are Affected by Healthcare Reform?

The good news for many small enterprises is that only organizations with 50 or more full-time employees will be required to carry coverage.  Those businesses that fail to comply will be penalized $2,000 for each employee over the 30th. So, if your business has 60 employees, and you do not offer coverage, it will be penalized $60,000.

Employers with fewer than 50 full-time employees are not required under the regulation to maintain insurance coverage for their staff.  If the business so chooses, it may participate in a health insurance exchange overseen by the state. These exchanges broaden the field of insurance options the company can choose from.  Additionally, companies with fewer than 24 full-time employees are eligible for the Small Business Tax Credit when they provide health insurance. The amount of this credit is determined by the number of employees and the average annual salary of those employees.

Can a Business Keep its Current Healthcare Plan?

Plans purchased prior to March 23, 2010 will be grandfathered in and considered exempt from the current standards provided at least one employee was covered, and the coverage has been continuous since that time.  In the event that a plan was in effect during that time but was replaced with another plan, the new plan may still receive grandfathered status provided the new plan's coverage is equal to or better than the original plan, with premiums equal to or less than the original coverage.

Plans which don’t meet the requirements for grandfathered status must offer fair and equal coverage without regard for salary or compensation. Furthermore, the coverage must not have any lifetime limitations, must cover preventative care, and must cover employees' children up to the age of 26 in order to satisfy the mandate.

When Will the Exchange Be Available?

The Small Business Health Options Program (SHOP) will be available beginning January, 2014, and will allow businesses with fewer than 100 employees to participate. If the state wishes, it may limit the size of participating companies to fewer than 50 employees during the initial phase. After 2017, all businesses with fewer than 100 employees will be allowed to participate. In the event that the state has not established an exchange by the last quarter of this year, HHS will intervene to ensure the exchange is operational, and that the transition to the new healthcare mandate flows smoothly.

For businesses meeting the size requirements of the mandate and not currently offering health coverage, the new law will increase overhead expenses significantly. For other businesses, the new law may offer enough incentives to offset most of the expenses. Entrepreneurs wishing to accurately calculate expenses and tax incentives can call us at 1-888-888-8888 for assistance.

Posted 11:42 PM  View Comments

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