The new laws reforming health insurance can make for some challenging reading. Even if you get all the way through it, interpreting it can be even worse. The regulations regarding small businesses can seem more than a little complex.
The Good News
When it comes to health insurance reform, the good news is that there is some time before the regulations take affect. For many of the new rules, you have until 2014 to get things figured out. And small business owners aren’t the only ones who need that time to get matters figured out — even legislators aren’t sure how certain parts of the reforms will be implemented.
If you’re already offering your employees some sort of health insurance and you have relatively few employees (under 50), you can get a significant tax break for offering that benefit — up to 35 percent of the cost of providing that health insurance. It’s expected that finding an affordable plan to offer as a benefit to your employees will become easier with the new reforms in place. Most importantly, the legislation will create state-based exchanges in which you will be able to find more cost-effective solutions to the problem of providing insurance.
If your business isn’t in a position to offer health insurance to employees, it is worth noting that, even after 2014, many small businesses will not have an obligation to offer health insurance.
The Bad News
It looks likely that there are going to be some increased costs for small business owners due to the reforms. Just the costs of administration will go up — even if you aren’t offering a health insurance plan. For instance, you’ll need to fill out extra tax forms. The W-2 becomes more complex as a result of the reforms.
Your personal tax burden may also go up. If your earnings exceed $200,000, the Medicare hospital tax on the money you have earned will increase by 0.9 percent. Additionally, the IRS is looking to improve income tax collection, which will include measures such as requiring business owners to complete 1099s on all payments of $600 or more to corporations. Until now, the forms were only necessary for unincorporated businesses.
Lastly, the reforms do very little to curb the growing costs of health insurance in general. It’s not unreasonable to expect the premiums for a company-wide plan to increase every year for your business.
What You Can Expect
Right now, it’s difficult to know what your health insurance future holds. There are many decisions yet to be completed, no matter your tax forms end up saying. It’s important to stay as up to date with the reform process as you can.
Only involvement can help you make the right long-term decisions about both your business’ finances and your employees’ health. Investigate the situation thoroughly before you decide one way or the other.
Image by Flickr user Steve Rhodes
Google+Web.com is now offering forums designed to support small businesses in cities throughout the US. Learn more about these forums here: http://Businessforum.web.com/
Tags: health insurance, reform, small business
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