The Health Care Reform and Insurance for Self Employed
Jul 8th, 2011
Much of the healthcare reform provisions have not yet been implemented, but small business owners are already bracing themselves for the changes. They are considering ways to cope with the new law without hurting their business. Up until now, it is still uncertain as to how exactly insurance for self-employed will be affected. But these are the outstanding reforms they can expect:
Small Business Health Options Programs. Through SHOP Exchanges small businesses can pool together and purchase insurance. It will give business owners more self-employed health insurance coverage options.
While the SHOP exchanges are still on hold (until 2014), small businesses with not more than 10 full-time employees earning less than $25,000 annually will qualify for a tax credit of 35% of health care expenses.
Small Business Tax Credit. Small business owners who will provide health care benefits to their employees will be given tax credits as incentives. Smaller businesses whose employees receive minimal income will get higher tax credits.
Providing Insurance Depending on How Big Your Business Is. Businesses with fifty or fewer employees will not be required to offer health insurance plans. But businesses with over fifty employees will be required to offer health insurance benefits. Failure to do so will warrant a penalty of $750 a year for every full-time worker. The medical and insurance benefits that will be offered should be according to the standard set by the government. At least sixty percent of the employees should be covered if not, they will also incur penalties.
Reduced Sick Leaves. Since they are ensuring that employees get adequate health care, sick leaves are going to be reduced.
“Cadillac Plans”. Insurance for self-employed plans that cost $10,200 a year for individuals or $27,500 for family coverage without dental coverage, will be taxed by 40% of the amount that is more than the specified limit. But the sad part is, the policyholders will bear the cost.
However, nothing is definite until the health care reform is fully implemented in 2014. Just keep yourself updated with the developments and how they will affect you.