Health Care Reform and Small Business
There has been a great deal of coverage in the media regarding health care reform and how it will affect businesses, particularly small businesses. Sorting out the requirements and implications has left many business owners scratching their heads trying to understand how health care reform affects their businesses.
In an effort to clarify the confusion, here are five things small employers must know about employee health benefits in the new health care environment:
1. You don’t have to provide benefits now. Most employers are not required by law to offer health-related benefits to their employees. This has been a point of confusion for many small business owners.
2. You may not have to provide benefits ever. In 2014, businesses with fifty or more full-time employees will be required to provide health insurance coverage for their workers or pay a penalty. This is will be the law unless the Supreme Court determines the Patient Protection and Affordable Care Act is unconstitutional. Regardless, you do not have to provide employee health benefits by 2014 if you employ fewer than 50 employees.
3. You do need to claim your tax credit. Your business is eligible for the Small Business Health Care Tax Credit if you have fewer than 25 full-time employees, cover at least 50% of the cost of their coverage, and your employees have average wages of less than $50,000 a year. To determine the amount of your credit, talk to your accountant and complete IRS form 8941.
4. You don’t have to report benefits on your W-2’s. PPACA requires employers to report the cost of coverage under an employer-sponsored group health plan on employees’ Form W-2s. However, this requirement was optional for all employers for the 2011 tax year. And the reporting requirement is still optional for businesses filing fewer than 250 W-2 forms for 2012. Reporting will remain optional for smaller employers until further guidance is issued.
5. You must provide proper notice. Under COBRA, employers with 20 or more employees that provide health benefits must continue to provide coverage to an employee when he or she leaves. You can require the employee to pay the full cost of the coverage and a 2% administrative charge. However, you must notify your plan administrator within 30 days of the employee leaving so your administrator can provide the proper employee notice.
Health care reform is confusing, but VISICOR can help you sort out. Our team is available to help you navigate the new health care benefits environment. Call us today at 281-824-3124, or use our convenient contact form to send us your question.