Changes in federal health care legislation: what small business owners should know.

Author:Schwartz, Robert H.

There are numerous legislative changes in the Patient Protection and Affordable Care Act ("PPACA") that impact businesses and the manner in which they will handle health insurance plans now and in the future. In addition, there are new and specific taxes that directly impact industry segments and individuals as well. As has already been well publicized, the legislation is in the thousands of pages. The following represents a sampling of some of the areas of impact to businesses and individuals:


  1. The creation of Health Insurance Exchanges

  2. Guarantee issue and renewability of health insurance

  3. No lifetime or unreasonable limns permitted on health insurance

  4. All health insurance plans must provide coverage for children up to age 26

  5. There are minimum benefits that must be offered by health insurers

  6. Increased screening of providers and suppliers

  7. Data sharing among many government agencies

  8. Overpayments to providers are required to be reported within 60 days

  9. Increased use of Recovery Audit Contractors

  10. Jan 1, 2013 Medicare Tax increased by 0.9 percent for those earning $250,000 or more for joint filers and those earning $200,000 or more for single filers.

  11. Jan 1, 2013: 3.8 percent tax on unearned income for joint filers earning $250,000 or more and for single filers earning $200,000 or more.

  12. Threshold for deducting medical expenses increased to 10 percent of Adjusted Gross Income beginning in 2013. For those 65 and older, the threshold will remain at 7.5 percent for another five years.

  13. Small Employer Health Insurance credit available to small businesses that incur health insurance costs. The credit is 35 percent of premium costs (50 percent Starting in 2013) incurred by eligible businesses and 25 percent (35 percent starting in 2013) for tax exempt eligible small employers beginning in 2010. Small employers are those with 10 or less full-time employees who have annual wages of less than $25,000 and a contribution arrangement in effect. The credit is phased out for employers with 25 or more employees or average annual wages exceeding $50,000.

  14. Beginning in 2014, U.S. Citizens and legal residents must maintain health insurance coverage for themselves and their dependents or pay a penalty. The cap starts at 1.0 percent and $95 per adult and by 2016 is 2.5 percent and $695 per adult.

  15. Beginning 2014, large employers will need to offer employees options to participate under a health plan providing minimum...

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