Healthcare Reform – When Will It Affect My Business

Business Survival Tip
Episode 38
By Carl Kleimann
April 14, 2010

Full Interview transcript

Carl: Hello business owners this is Carl Kleimann with another Business Survival Tip from Odyssey OneSource.
After a yearlong debate over healthcare reform, we finally have some answers. Admittedly, many questions still surround this voluminous legislation and as the regulations are written, those too will be answered. Today, I will address the timeline for the major elements of healthcare reform affecting small businesses.

This year, small businesses with fewer than 50 employees will be eligible for tax credits covering 35 percent of their healthcare premiums. As plans renew, lifetime limits and restrictive annual coverage limits will be prohibited. Young adults will be allowed to remain on their parent’s insurance until their 26th birthday. And insurers will be barred from imposing exclusions on children with pre-existing conditions.

In 2011, a plan to provide a new vehicle for small businesses to offer tax-free benefits will be created. This is intended to ease the small employer's administrative burden of sponsoring a cafeteria plan. The Medicare payroll tax will increase from its current 1.45 percent to 2.35 percent for individuals earning more than $200,000 and married filing jointly above $250,000.

In 2013, contributions to flexible savings accounts will be limited to $2,500 per year, indexed by the Consumer Price Index in subsequent years.

In 2014, companies with 50 or more employees must offer coverage to employees or pay a $2,000 penalty per employee, excluding their first 30 employees, if even one of their employees receives a tax credit. Waiting periods before insurance takes effect will be limited to 90 days. Employers that do offer coverage but has one or more employees that receive a tax credit will pay $3,000 for each worker receiving a tax credit. Insurers can no longer refuse to sell or renew policies because of an individual's health status. Health plans can no longer exclude coverage for pre-existing conditions. Insurers can't charge higher rates because of heath status, gender or other factors. Health plans will be prohibited from imposing annual limits on coverage. Health insurance exchanges will open in each state to individuals and small employers to allow them to comparison shop for standardized health coverage

And finally, in 2018, employers offering "Cadillac" plans will be subject to an excise tax. For example, employer-provided health plans valued beyond $10,200 for single coverage and $27,500 for family coverage will be subject to a 40 percent excise tax on those premiums.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey OneSource, ranked as the number one Professional Employer Organization three years running by the Black Book of Outsourcing.
For more information on this and other issues affecting employers, please visit www.odysseyonesource.com