Small Business Health Insurance is one of the most difficult parts of employee benefits when you are experiencing in today’s difficult economic times. Having sufficient income to cover all the business general expenses, including wages, can be very difficult and, often, expenses must be cut. There has been a tremendous increase in the cost of this coverage over the past few years and many companies have found it increasingly difficult to continue to supply this coverage for their employees.
Under the new Health Care Reform (Affordable Care Act, ACA), which is to go into effect in 2014, there are specific rules regarding small businesses. A lot depends on whether you have fewer than 50 employees, up to 100 employees, or more. There are penalties involved, in some cases, if you do not carry employee this insurance.
1. If you have fewer than 50 employees, you will not be penalized
2. If you have up to 100 employees, you will be penalized, annually
3. Companies with up to 100 employees may obtain employee insurance through a state program, if one is available.
4. The state programs must have medical, mental health, prescription drug and rehabilitation benefits.
The plan offers tax credits for your business, if you qualify, to pay for part of the coverage cost but there are conditions attached.
1. You must have 25 or fewer employees with average annual wages under $50,000 and you must pay at least 50% of the costs. This credit will be retroactive to January l, 2010.
2. If you have 10 or less employees with average annual wages of up to $25,000 you will get credit to pay up to 35% of the premiums expense.
It is important to remember that, although there are a number of tax credits for small businesses currently in effect, most of the ACA regulation credits do not become effective until 2014. As with any legislation passed, that is to go into effect later, it is always subject to change. With the amount of opposition that has been raised, concerning this Bill, it remains to be seen if it will remain in its current form.
California recently signed into law the formation of a state health exchange which is required under the ACA plan. At the current time, this exchange covers businesses with up to 100 workers. There are current discussions, in Washington, of increasing the number of workers covered.
The rapid rise in these care premiums has caused many small businesses to discontinue providing employee insurance coverage all together or have their employees assume more of the cost. This has been unfortunate, as illness means loss of work for the employee and loss of labor for the business. However, the small owner’s position can be understood with the cost of supplies and other basic materials increasing.
It is reported that there are 29 million of these businesses in America. This means that millions of workers are affected by things such as health care coverage.
One report also suggests that the premium rates will increase when required coverage goes into effect, even though purchased through the exchanges. There is no doubt the overall result regarding the Small Business Health Insurance for employees will change. The report also suggests that employees will demand this coverage, knowing that the business will be penalized if uninsured.