Small Business

How the Health-Care Bill Affects Small Business


What to expect when you're expecting health-care reform

The health-care reform law, all 2,400-plus pages of it, won't be fully implemented until 2018. While some self-employed people and small employers won't see any effects for a few years, others will feel the impact almost immediately. Here are some milestones entrepreneurs will want to watch.

2010

Businesses that pay more than half of employees' health benefits and have fewer than 26 employees and average annual wages of less than $50,000 can claim a tax credit of up to 35% of the cost of premiums.

Self-employed people with medical conditions will be able to buy insurance at reduced rates, and this fall insurers will no longer be able to put lifetime limits on coverage.

2011

Companies with fewer than 100 employees will be eligible for grants to set up wellness programs. Employers can offer bonuses of up to 30% of the cost of insurance to workers in those programs.

Employers will be required to disclose the value of health-care benefits on workers' W-2 forms. Starting in 2018, employees with the most expensive plans will pay taxes on those benefits.

2013

The wealthy will see Medicare taxes rise to 2.35% (from 1.45%) on earnings over $200,000 for individuals and $250,000 for married couples. Tax-exempt contributions to flexible spending accounts for medical expenses will be limited to $2,500 per year.

Employers' tax deductions for the cost of retirees' Medicare drug benefits will be eliminated.

2014

All citizens and legal residents must have insurance, and individuals and small businesses with up to 100 employees will be able to shop for coverage in new health exchanges. Insurers will be barred from rejecting people with preexisting conditions.

Companies with 50-plus employees that don't offer insurance could face penalties of $2,000 per uncovered worker.

Data: Census Bureau, Congressional Budget Office, IRS, and Henry J. Kaiser Family Foundation

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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