What the Affordable Health Care Act Means for You.

It’s no secret that the Supreme Court upheld the “Patient Protection and Affordable Health Care Act”-being referred to as Obamacare.   Organizations, politicians and individuals everywhere have reacted with varying opinions, emotions and sometimes profanity.   It is clear that this will long be a topic of heated debate, not only in the upcoming elections, but at dinner tables around the country.

However, as small business owners, opinions and political views need to be momentarily set aside to determine what happens next, what effect this has on you. Certain provisions of the Act will go into effect in 18 months, in January 2014.  In addition to the 2.3% tax on the revenue of medical device companies and the intellectual property protection in the biotechnology sector, businesses will need to offer a health plan to their employees, or pay tax.

If you run a large corporation, with an existing benefits package, you may think this may has little to no effect on your current structure, budget or benefits department. However, starting in 2018, the Act places a 40% excise tax on the benefit-rich “Cadillac” plans, with values that exceed $10,200 for individual coverage, $11,850 for retirees, $27,500 for family coverage and $30,950 for high-risk professionals.

Smaller reporting companies and private companies may not currently offer insurance benefits, as it has been cost prohibitive; or alternatively they offer a basic minimum coverage, lower-cost plan.  Starting in 2014, the Act mandates that all companies with 50 or more employees must offer a certain level coverage of health insurance. For companies who fail to offer the insurance or who do not offer insurance that meets that specified level of coverage will be fined, or “taxed” as much as $2,000 per employee. Additionally, individuals will be taxed for not having insurance through their employer or a state-sponsored program.

As management of a small business, you need to ensure you stay informed. Now, before the provisions take effect, begin to gather the information needed to analyze the impact of these new taxes and costs. Consult with your CFO, look at your revenue projections and your plan for expansion and hiring. If you are unable to offer the health insurance, can you afford the penalty?  The upcoming weeks will only offer more discussion and analysis of the application of the Act. Be involved and listen.

You can view the full text of the Act here.

 Author: Jennifer Trowbridge, Stoecklein Law Group, LLP

This entry was posted in Affordable Health Care Act, Legislation, Small Business Management and tagged , , , . Bookmark the permalink.

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