Nearly every major small business group opposed it. But the Patient Protection and Affordable Care Act is now law – and it’s not all bad news for small business owners. A timeline of major changes for small business:
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.
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.
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.
Business reporter Carol Tice (www.caroltice.com) contributes to several national and regional business publications.