June 2010 - Health Care Reform and Your Business
Now that health care reform legislation is the law of the land, many
small businesses are asking how they will be impacted. The Chamber
has been researching this and we have determined that many of the
specifics are either unknown at this time or don’t go into effect
until several years from now. We will be posting updates on our
website at
www.hamilton-ohio.com as specific details of the
legislation become clear. Until then, one significant tax benefit is
available to employers in 2010, specifically, the small business tax
credit.
From 2010 to 2013, small businesses with fewer than 25 full-time
equivalent employees (FTEs), who on average earn less than $50,000
per year, will be eligible for tax credits paying up to 35% of their
insurance costs. For tax-exempt employers, the maximum credit is 25%
of the allowable premium expense. For tax years beginning in 2014,
the maximum credit is increased to 50% for for-profit employers and
35% for non-profit employers. However, the increased credit is only
available to employers for up to two consecutive tax years.
The number of FTEs is determined by dividing the total hours for
which the employer pays wages to employees during the year (but no
more than 2,080 for any employee) by 2,080. The result will
determine the number FTEs. Again, to qualify for the credit, average
annual wages of the employer’s employees must be less than $50,000
per FTE. Average annual wages are determined by first dividing (1)
the total wages paid by the employer to employees during the
employer’s tax year by (2) the number of FTEs for that year.
To be eligible for the credit, small employers must contribute a
uniform percentage of at least 50% toward their employees’ health
insurance coverage. Only the portion of the premiums paid by the
employer is counted in calculating the credit. If an employer is
eligible for the credit, it will be claimed on the employer’s annual
tax return. The IRS is supposed to issue guidance that will provide
transition relief for the 2010 tax year for employers that would
otherwise qualify for the credit except that they didn’t provide a
uniform percentage of premiums equal to at least 50% of the premium
cost.
Other changes as a result of health reform include:
• Young adults up to 26 years old can stay on their parents’
insurance.
• Insurers are barred from imposing exclusions on children with
pre-existing conditions.
• Insurers cannot rescind policies when a person becomes ill.
• Lifetime limits on benefits and restrictive annual limits are
prohibited.
• New plans must provide coverage for preventive services without
co-pays; existing plans must comply by 2018.
We will be posting more details about the specifics of health reform
on our website in the weeks and months ahead as they become
available. Much of this information is being provided by Horan, a
Gold Sustaining Member of the Greater Hamilton Chamber of Commerce,
and the U.S. Chamber of Commerce. Please check our website regularly
for the most current information! Thanks for your partnership!
Updates from Horan:
Graydon Head Glossary of Terms
Graydon Head Top 6
Top 10 Items Affecting Employers within 6 Months
Health Care Reform: Small Business Tax Credit & Reinsurance Program
for Early Retirees
Health Care Reform: Provisions Applying to Employer Plans
Health Care Reform: Changes Affecting Participant Elections in
Employer Plans
Health Care Reform: Grandfathered Health Plans
Health Care Reform: PPACA Mandates-Applicability to Plans with
Grandfathered Status
Health Care Reform: Regulations Issued on Health Care Reform
Mandates
|
|
 |
Thursday, September 09, 2010
Wednesday, September 15, 2010
Thursday, September 16, 2010
Wednesday, September 22, 2010
Thursday, September 23, 2010
|
 |
|
