Health Care Legislation: What Small Businesses Need to Know

2010:

Health insurance premium tax credits. Businesses with fewer than 25 employees who earn an average of less than $50,000 annually qualify for an annual tax credit of up to 35 percent of their health insurance premium costs. The credit is based on a sliding scale, with smaller companies that have lower-paid workers receiving the largest credit. In 2014, the maximum credit rises to 50 percent. The bottom line: This program offers a way for companies to recover some of the cost of offering HSAs to their employees.

2011:

Wellness grants. Small businesses with under 100 workers that institute wellness programs are eligible for government grants beginning in 2011. The law doesn’t specify how much a qualified company can receive from the $200 million grant program, but it runs through 2015 or until the funding is exhausted.

Health care accounts. A federal Simple Cafeteria Plan becomes available to small businesses, eliminating the administrative burden of creating tax-free health savings accounts (HSAs) for workers. The change makes it easier for businesses to offer HSAs, which allow workers to pay for some medical out-of-pocket costs with pre-tax dollars.

2014:

State-based insurance exchanges open. These insurance marketplaces will give individuals and small businesses a new place to turn for a variety of affordable health care options. Businesses purchasing insurance through the new state-run exchanges can deduct 50 percent of premium costs for two years.

Mandated insurance for some. Companies with 50 or more full-time workers will be required to either provide health coverage or pay a $2,000 annual per-worker fee above 30 workers.

Three industries singled out

Three industries – tanning salons, construction, and restaurants – got special attention in the bill, and not in a good way.

Tanning salons: Starting in July, individuals using tanning salon services will pay an extra 10 percent sales tax, with monies going to help pay for other health care costs.

Construction: In the construction industry, only firms with five or fewer workers are exempt from the 2014 coverage mandate. The definition of “construction firms” under this rule is yet to come.

Restaurants: Under the mandated insurance provision going into effect in 2014, two part-time workers equal one full-time worker, impacting many restaurant owners. Also affecting chain restaurants with more than 20 locations: new federal rules requiring menus to disclose calorie content.

You can read the full text of The Patient Protection and Affordable Care Act. The wellness program is under section 10408.