The Healthcare Reform Bill and Your Private Practice

What the health care reform bill looks like on paper.

The Affordable Care Act (a.k.a. "Health Care Reform Bill").

As a small business owner, do you know how the Affordable Care Act affects you as an employer? For those medical professionals who are still in private practice and not working for a hospital or as part of a health care system, you may be facing higher costs and what feels like limited options. When it comes time for you to provide health insurance for your employees, will you have the funds in place? Do you know if your small business is eligible for a tax credit for health insurance costs?

The Run Down

  • By 2014 Small Business Health Options Programs (“SHOP Exchanges”) will be open in every state.
  • Until the SHOP Exchanges are set up, businesses may be eligible for a 35 percent tax credit of health insurance costs.
  • Effective 2012, insurers will no longer be able to set rates or exclude coverage based on pre-existing conditions.
  • Starting in 2014, businesses with more than 50 employees will be required to either offer healthcare coverage or pay a penalty of $750 a year per full-time worker.
  • Plans costing more than $10,200 a year for individuals or $27,500 for family coverage will be subject to a 40 percent tax on the portion of the cost that exceeds the limit (this excludes dental and vision plans).

Of the myriad of requirements that are part of health care reform, the one with the largest impact to employers is that, starting in 2014, companies with 50 or more workers have to provide health insurance to their employees or face a penalty of $2,000 for each employee not covered.

Confusion has set in over the 50 employee number. The U.S. Small Business Administration estimates that 96 percent of all U.S. businesses have fewer than 50 workers. Additionally, the SBA has stated that 96 percent of U.S. companies with 50 or more employees already provide health insurance to their employees.

If you have a small business, or plan to open one, here is how the health reform law could affect you:

  • SHOP Exchanges. By 2014, each state will have Small Business Health Options Programs, or “SHOP Exchanges,” where they will be able to come together to buy insurance.
  • Tax Credit.
    Until the Shop Exchanges set-ups are complete, which should take about two years, businesses with less than 10 full-time equivalent employees making less than $25,000 a year (on average) may be eligible for a tax credit of 35 percent of health insurance costs.
  • Pre-Existing Conditions.In 2014 set rates and exclusion of coverage based on pre-existing conditions will no longer be an option for insurance companies. However, a ban on lifetime limits on coverage and on canceling a policy already issued except in cases of fraud will go into effect immediately.
  • Penalties. If your business has more than 50 employees in 2014 you will be required to offer healthcare coverage or be slapped with a $750 penalty per full-time employee each year. If you offer coverage you’ll need to be sure it meet the correct criteria or face further penalties.
  • Cadillac Plan Tax. The so-called “Cadillac” plans will be subject to a 40 percent tax on the cut of the costs that are more than the limit. The cost could be passed along to plan holders as a higher premium or possibly covered by insurers.

The Takeaway

Health care costs are high the rise and will get higher once the provisions of the health care reform bill take effect. You may not have the money available to invest in a health care plan that will satisfy the requirements of the Affordable Care Act. AmOne can help. Our knowledgeable associates, many of whom are unsecured loan specialists, are ready to help you find the right financial solution to keep your private practice fluid. AmOne is not a lender; we offer solutions. The call is free and we won’t try to sell you anything. Find out how to reach us and learn more about how AmOne can help you today.