Healthcare Reform Bill Summary Of The Benefits To Small Business

By Audrey Howard on March 28, 2010, 7:44 am

One thing is for certain: the new health care bill promises a number of changes in the way small business owners purchase and offer health care for themselves as well as for their employees. These changes will not happen over-night. Many of the new provisions will not take effect until 2014.

The Small Business Health Options Programs

States will be required to set up Small Business Health Options Programs, also referred to as “SHOP Exchanges.” This will allow small businesses (defined as businesses with no more than 100 employees) to pool together to purchase insurance. The Congressional Budget Office has estimated that the SHOP Exchanges will ease the insurance costs for small businesses.

The Tax Credit Will Remain In Place

The CBO, working with the fact the tax credit remains in place, suggests that the tax credit will affect about 12 per cent of individuals – those who are covered with the small group insurance market. It is predicted that this will lower their insurance cost by between 8 and 11 per cent. Insurers will not be able to set rates or exclude pre-existing conditions. The only variable of premiums will be due to geographic location, tobacco use, and age.

 

Most Businesses Will Be Required To Offer Health Care

Starting in 2014 businesses employing more than 50 people will be required to offer healthcare coverage. If they choose not to they will be forced to pay a penalty of $750 a year per full-time employee. Employers will need to offer minimum benefits to their employees. The ‘Cadillac’ plans, which cost more than $10,200 per year for individuals or $27,500 for family coverage will have a 40 per cent tax on the portion of costs above the limit. The immediate future will see states begin working on the SHOP Exchanges. They can begin receiving federal aid assistance as early as next year.

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