The US health care reform, which for the most part takes effect in 2014, represents the most significant change in our country’s health care policy ever. While many of the specific details of the legislation will be defined at the state level, the Federal Government has mandated some truly significant overhauls. However, determining the effects on specific individuals or businesses still requires some level of speculation. Recent appeals court activity points to likelihood that at least parts of the bill will be amended; yet, it is doubtful that businesses will avoid the planned effects.
Assuming the remainder of the legislation goes into effect in its current form, businesses and business owners will be most significantly affected by the following points:
- Starting in 2014, businesses with more than 50 employees will be required to either offer healthcare coverage or pay a penalty of $2000 a year per full-time worker. The coverage offered will also have to meet minimum benefits standards. Part-time employees will be included in the 50-employee minimum based on a proration of hours worked.
- Individuals and employers with less than 100 employees (50 by some State standards through 2016) will be eligible to purchase pre-qualified insurance coverage through Small Business Health Options Programs (SHOP).
- A tax credit for small employers with employing low wage earners will remain in place, increasing up to 50% of costs, for the first two years a company buys insurance through a state exchange.
- “Cadillac” plans, defined as those costing more than $10,200 a year for individuals or $27,500 for family coverage, will be subject to a 40% tax on the premium dollars exceeding the limit. This tax would appear to be paid by insurers; however, it is inevitable that it would eventually be passed along to plan holders in premium increases.
- Executive benefits differ from those of the average workforce will come under increasing scrutiny.
- Individuals earning more than $200,000 a year, or couples earning $250,000 or more, would be hit with a 3.8% surcharge on investment income to help pay for the bill.
In a futile attempt at brevity, I have summarized a few key points to take effect in 2014 when the Health Care levee breaks; however, there will undoubtedly be significant changes to parts of the Bill between now and then. It is my goal as a liaison between my clients, their employees and the insurers to remain fully up to date on changes as they occur. Health Care Reform, in its current form, will affect us all in varying degrees. Are you informed? Is your business positioned to withstand the initial shock of the sweeping overhaul?