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How Will Healthcare Reform Benefit Small Businesses?

2010

  • New tax credits for small employers contributing at least 50% of the total premium:

o Full 35% credit of an employer contribution will be available to small businesses with fewer than 10 employees averaging less than $25,000 annual wages.

o Sliding-scale up to 35% if fewer than 25 employees and average annual wages of less than $50,000

o These are both refundable tax credits for non profit organizations.

  • Insurers will no longer be able to drop coverage if you or an employee gets sick
  • No lifetime caps on benefits

2011

  • Grant money awarded to small businesses that establish employee wellness programs
  • Long‐term care insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become functionally disabled.

2014

  • Tax credit will increase up to 50% of the employer premium contribution for previous 2 years
  • Small business owners with fewer than 100 employees can shop for and compare plans through the new online marketplace called the Small Business Health Options Program (SHOP) exchange

• Pool risk with other small businesses, gives same competitive advantage as large businesses, lowering costs and freeing up revenue to hire additional employees or give raises
• More choices of health plans through the Exchange; compare plans–apples to apples
• Employers select plan(s) (bronze, silver, gold, platinum)to offer, and let employees pick the plan that works best for them

Employer Insurance Coverage Requirements:
o 50 or fewer employees: Exempt from employer requirements to provide insurance
o 51 or more employees: Don’t offer coverage, and 1 or more full-time employees receive premium credit, employer assessed $2,000/full-time employee, excluding the first 30 employee.
o 51 or more employee: Offer coverage, but 1 or more full-time employees receive a premium credit, employer pays the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee

  • Insurers banned from discriminating against health status (pre-existing conditions), so costs won’t skyrocket if an employee gets sick
  • Clear language required on insurance forms to make it easier to understand what benefits and doctors are covered through a given plan
  • Annual limits on coverage prohibited
  • Deductibles limited to $2,000 for individuals and $4,000 for families in small group market