Health Care – It’s not time to panic, yet.
With the Supreme Court upholding most of the Affordable Care Act business owners will need to acquire an understanding of what the Act means to them and their business. Here is a quick rundown on what you need to know –
1. How many employees do you have in your business?
If you have 50 employees or more, beginning in 2014 you must start providing health insurance for them. If you have less than 50 employees you do not come under the mandate to provide employees with health insurance.
2. How about the fines for not providing health insurance?
Any company with 50 or more full-time employees must start providing health insurance for its employees but if you don’t do so and a single worker needs to turn to the government for a health care tax credit or subsidy on the new health exchanges then your company will be subject to fines. The penalty starts at $40,000 and increases with the size of your company.
3. If your company is subject to the mandate to provide insurance for your employees there is specific coverage required.
How will the Act affect a sole-proprietor? Everyone must purchase some sort of health insurance by 2014. If your company has less than 50 full-time employees then the responsibility to purchase the health insurance falls on the employees not the business. The Act includes a fine for an individual who needs health care but doesn’t have insurance. The fine will begin in 2014 at $95 or 1% of their income, whichever is higher. By 2014 there should be state insurance exchanges up and running which will spread the risk among a large number of people and (in theory) bring the cost of the insurance coverage down for everyone.
This is just a summary; there is a lot more to learn and fortunately there is some time to take in the lessons.
Jeremiah K. Murphy, CPA is an accounting firm providing tax services, audits and business consulting.