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Health Reform 101

with Lisa Zamosky

WebMD helps readers understand their health insurance and the new health care reform law. The Affordable Care Act is bringing sweeping changes to American health care. Lisa Zamosky is here to help you navigate the health care maze and understand how these changes affect you.

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Tuesday, March 13, 2012

Small Business Owners: 4 Things to Know About Health Reform

By Lisa Zamosky

Small Business Owner

If you run or work in a company with fewer than 100 employees, the Affordable Care Act has a number of significant changes in store for you. Here, four provisions of the health reform law that small business owners and their employees should be aware of.

New Insurance Exchanges: Starting in 2014, the law requires states to establish insurance marketplaces where individuals and small businesses can shop for, compare, and purchase health insurance plans. Small businesses interested in offering employees health insurance will have the option to purchase plans through the Small Business Health Options Program (SHOP exchanges).

As a prelude, the government website, Healthcare.gov, added a feature to its online consumer health insurance comparison tool last November that enables small-business owners to compare health benefits and their costs.

Tax credits: If you run a small business that employs fewer than 25 workers earning less than $50,000 a year, and you pay for at least half of your employees’ health insurance costs, you may qualify for a tax credit of up to 35%.  Starting in 2014, those credits increase to 50%.

Penalties: The law does not require small businesses to offer health insurance to employees. However, beginning in 2014, companies with more than 50 employees will either have to provide workers with health insurance (and pay for at least 60% of its cost) or pay a penalty of $2,000 for each employee that works an average of 30 hours or more each week.

If your company has fewer than 50 employees, you’re exempt from these penalties. And if your business has 51 or more employees you won’t pay a penalty for part-time workers not offered health insurance coverage.

Wellness programs: Work-based wellness programs aimed at keeping employees healthy, which in turn (hopefully!) reduce an employer’s health care costs, have been a hot and growing trend for many years. However, many small companies have not traditionally offered wellness programs that provide incentives for employees to attend smoking cessation classes, exercise, or to identify brewing medical problems, such as high blood pressure or diabetes.

Under the new law, these firms will gain incentives to begin doing so. Companies with fewer than 100 employees that didn’t have a wellness program in place when the law took effect in March 2010 are eligible for grants that help them put one in place.

Do you run a small business? If so, what concerns do you have about providing employees with health insurance? How do you think the new law will help or hurt your business? Share your thoughts in the comments below.

Photo: Brand X Pictures

Posted by: Lisa Zamosky at 8:47 am

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