Healthcare reform is having a profound impact on small businesses and their employees. Unable to benefit from group discounts in the past, many small businesses chose not to provide health insurance because it was too expensive. However, they can now pool their resources to purchase the health coverage their team members need.
The Congressional Budget Office estimates that small businesses will be able to lower their health insurance plans by up to five percent now that they can pool their resources. Even companies with fewer than 10 employees will be able to offer small business health insurance thanks to the recent healthcare reform. They will also be able to reduce costs further bay taking advantage of a tax credit for up 35 percent of their insurance costs. As the companies grow and have more employees, the credits are gradually reduced.
Healthcare Reform 2014
After 2014, as the SHOP Exchanges become available, the tax credits will increase to a maximum of 50 percent for the first two years that employers provide small business health insurance. As with the existing credits, the tax benefits are phased out as the company size and employee pay levels increase. The CBO believes that individuals investing in these group plans will then save up to 12 percent compared to what is currently available.
There are other changes included in the healthcare reform laws that will benefit all citizens. Pre-existing conditions will no longer cause rates to rise or result in someone being denied coverage. Also, companies with more than 50 employees will be forced to either provide healthcare or face steep fines. More preventive services will also be available at no cost to consumers, including routine childhood vaccinations, prenatal care, cancer screenings and counseling for quitting smoking, losing weight and making other healthy changes in your life.
Many people are still unclear about the details of the healthcare reform and how it will impact them. Small business owners and people who work for small companies may reap the greatest benefit as they pool their resources and make healthcare more affordable. The plans provide insurance to the more than 40 million Americans who were previously uninsured, and they make insurance coverage more affordable for small businesses and their workers.
It took a long time to get health care reform passed, and there are still many questions about how these changes will affect employers and consumers alike. However, it is clear that small businesses stand to benefit from the exchanges and other improvements in health insurance.