Business owners, entrepreneurs need to know about new health care law

 

Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

One of the greatest challenges for aspiring entrepreneurs to make the leap into business ownership has been health care. For most, the stability of having a consistent salary with benefits is enough to force many to continue working for others.

Meanwhile, the debate over a national healthcare coverage plan saw heated debate for more than just this past year. Health care reform has been battled over for many years and even decades. However, 2010 has seen the passage of the country’s first health care plan that has many confused and concerned.

What does Health Care Bill (HR 3962) mean for small businesses and independent contractors? The overall health care bill focuses on providing health care coverage to all U.S. citizens. However, there is confusion about who is responsible for the coverage and when the legislation will be implemented.

The following summarizes the major points to the new legislation:
• Businesses with 50 employees or more will need to provide a health care coverage plan to all employees.

• Individuals, who are not covered by an employer, must acquire health care coverage either through purchasing a plan for themselves or carry the government program (of which each state will be asked to create health care “exchanges”).

• Those not willing to carry health care coverage will be fined by the IRS at $95 or 1% of the individual’s income. The penalty is set to dramatically rise in 2016.

• Families will be allowed to keep their children on employer run programs until they obtain their own coverage or turn 26.

While the legislation has been passed, the full program will be phased in as the government needs to work out implementation details. Major milestones to be aware of include:
• 2014 is the timeframe for when the government will begin providing tax credits to help low income individuals to pay for health insurance premiums. The aid will be available on a sliding scale to households.

• 2014 is when all health insurance companies will have to take all insurance applicants, so insurance companies will not be able to deny anyone for coverage.

• Starting immediately, health insurance companies will not be allowed to cancel coverage if one were to get sick. Lifetime dollar limits on coverage will now be banned as well. Additionally, insurance companies will not be allowed to deny coverage to children due to “pre-existing” medical conditions.

Further details pertaining to the impact the National Health Care Plan continues to be developed by the Senate. The overall impact of this dramatic change remains to unfold, but businesses and citizens will see the impacts this change in health care quickly.

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Stockman can be reached at [email protected]