It can be a real challenge for small businesses to provide health insurance to employees. On average, small businesses pay about 18% more than large firms for the same health insurance policy, most likely because small businesses lack the purchasing power depth that large corporations have.
The health care law will offer tax credits for small businesses and in the future the ability to shop for insurance in the new Health Insurance Marketplace, which will help small business out tremendously.
Here are some points from the 2000 page bill that small businesses should be aware with the Affordable Care Act:
– If you have fewer than 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
– Under the health care law, employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program. This program is designed to lower the cost of premiums for all employees and reduce employer health costs.
– Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses. This will make the cost of providing insurance even lower.
– In 2014, small businesses with generally fewer than 100 employees can shop in the Health Insurance Marketplace, which gives you power similar to what large businesses have to get better choices and lower prices. In the Marketplace, individuals and small businesses can buy affordable health benefit plans. Open enrollment begins on October 1, 2013.
– The Marketplace will offer a choice of plans that meet certain benefits and cost standards. Starting in 2014, members of Congress will be getting their health care insurance through the Marketplace, and you will be able to buy your insurance through the Marketplace, too. Find out how you can get ready to enroll.
– Employers with fewer than 50 employees are exempt from new employer responsibility policies. They don’t have to pay an assessment if their employees get tax credits through an Exchange.
These points only scratch the information surface on the Affordable Care Act.
Learn more about important features of the new health care law and how it can impact your small business. Contact your Health Care Insurance Group Provider for more information and updates.