Healthcare and the small business haven’t had too good of a relationship recently with more expensive health care rates per employee in comparison to larger businesses. That’s led to some small businesses having to eliminate health care for employees due to the cost. But with coming changes to health care plans through the Affordable Care Act, small businesses and their employees might see a new day of better health care options.
Tax Credits for Businesses with Moderate Income Workers
Any small business that agrees to cover 50% of the health care premiums for low and moderate income workers will get that money back starting in 2014. Used as a tax credit, it works in conjunction with the new Small Business Health Options program (otherwise known as SHOP). The latter provides more health care options for small businesses to find something more affordable or a policy with better coverage.
Keep in mind that the tax credit only applies to small businesses with less than 25 employees. The SHOP program applies to those with under 50 employees, though increases to 100 in 2016.
New Options and Clearer Benefits
Starting in 2014, all small businesses have to provide more insurance options to employees through the ADA’s Insurance Marketplace plan. And new rules will require that the small business explain to employees exactly what their plans will provide so there isn’t confusion. While that might create a bit of a burden for the small business, this symbiotic process with health care is going to help both businesses and their employees in time. Employees will finally know what benefits they’re paying for after years of frequently not being made clear.
Reimbursement of High Claims Costs
Through a Transitional Reinsurance Program, you and your employees will have to pay insurers a small monthly fee to help cover any high claims costs they have. There might be criticism of this, even though the Small Business Administration says it’s calculated at only $5.25 a month. What makes it tolerable is that the fees are also tax deductible.
Better Wellness Programs
Prevention doesn’t get taught enough in the world of health care. Now small businesses will have more incentive to create thorough wellness plans with a 30% discount off the cost of their health coverage. If the wellness plan places particular emphasis on removing smoking from the business, that discount rises to 50%.
These kind of incentives are going to make small businesses much more of a reassuring environment.