Let’s start where one expert stopped.
“We don’t know how a lot of this is going to work,” says Randy Kammer, vice president of regulatory affairs and public policy, Blue Cross Blue Shield of Florida.
Like with any new law, it’s going to take time to understand the exact mandates and lasting effects of Congress passing the $940 billion health care reform.
The good news is most of the changes that will affect you won’t take place until 2014. The bad news, maybe, is that you have to start planning now. Once you understand some of the specific regulations, you’ll realize this is bigger than just buying health insurance. It could affect your finances, the number of employees you choose to employee and, ultimately, your strategy for growth.
“The thing that I would tell small business owners is they need to not run away from this, especially when there are things that are very confusing, very complex,” says Eileen Rodriguez, regional director, Small Business Development Center at the University of South Florida. “You want to be able to plan ahead and see whatever is coming at you, whether it’s good or bad, so you have time to plan and adapt properly.”
What you need to know
First off, if you have fewer than 50 employees, you’re exempt from the mandate that requires companies to provide insurance to employees by 2014 or be faced with a fine.
If you have fewer than 25 employees and average annual wages of less than $50,000, you’ll be able to see savings this year. A small business tax credit worth 35 percent of your contribution toward your employee’s insurance premium is expected to be given for 2010. The second phase of the tax credit begins in 2014. Those who purchase their employee health insurance through a state exchange will receive a tax credit of up to 50 percent.
“(Businesses) really need to focus on how do they get this temporary tax credit,” Kammer says. “How is it going to be issued? When can they take advantage of it? Because it’s my understanding that they can take advantage of it this year.”
Companies with fewer than 100 employees will be able to take advantage of state-based Small Business Health Options Program (SHOP) Exchanges in order to purchase coverage. The SHOP Exchanges will allow companies to enter into a pool to buy insurance.
“Small businesses are going to be able to pull together to purchase coverage under an umbrella,” Rodriguez says. “This should potentially allow these small firms to improve their purchasing power.”
The exchanges will be grouped by geographic region and are expected to be organized by 2014.
Companies with more than 200 employees are required to automatically enroll employees in their health insurance plans, but employees can opt out of the coverage.
[Page 2: What you need to prepare for]