Small Businesses Prepare For Health Reform Changes

The Associated Press/Washington Post: As business owners across the country consider the newly enacted health overhaul, "they're looking to Massachusetts for harbingers of things to come. Massachusetts' law, which mandates near-universal coverage and requires that businesses with 11 or more workers offer insurance, provided the blueprint for the health law signed by President Barack Obama. Massachusetts employers who don't comply face annual fines of $295 per worker." While many business owners have complained "that the state law has squeezed them financially during a tough recession, there's little evidence the law is forcing employers to close or sending them fleeing for the border. Other businesses have welcomed the law and business leaders helped guarantee its passage."

The laws are similar, but differ in a few ways. "The national law doesn't require businesses offer insurance but hits employers with 50 or more workers with an annual $2,000-per-employee fee if the company doesn't insure them and the government ends up subsidizing their workers' coverage. … Massachusetts has already fined more than 1,000 companies over $18 million for failing to offer medical insurance to their workers" (LeBlanc, 3/31).

The Associated Press/Washington Post also has a rundown of the perks and penalties for small businesses in the health reform law. Perks include tax credits for employers with 25 or fewer workers with wages of $50,000 or less starting in 2010, and insurance exchanges where business with up to 100 employees—and the self-employed—can pool together to offer better rates for health coverage (3/31).

In the meantime, Minnesota Public Radio News Q reports that Minnesota small businesses are wary of the changes. Businesses say the tax credits don't do enough to reduce the cost of insurance. "With 18 employees, Superior Steel is small enough so it doesn't have to provide health insurance under the Patient Protection and Affordable Care Act. But, if the company should offer a health plan, its tax bill would shrink. Small companies that qualify can get a tax credit of 35 percent of their contribution to a health plan. For a company the size of Superior Steel, the credit would be something less than 35 percent." The business' owner is not convinced that he'll be helped all that much (Kelleher, 3/30).

The same is true for some Oklahoma small businesses, KJRH (Tulsa, Okla.) reports. "Overwhelmed is just how insurance broker Paul Boullion has felt. 'I don't have all the facts. I don't think any of us do. Everyday you're getting a different e-mail with changes so what do you do?' said Boullion of Catalyst Benefits Group. For now, Boullion is focusing on what he does know and that's the impact it will have on businesses with fewer than 25 employees, like VYPE Magazine. He says, for the most part, it shouldn't see many, if any, sweeping changes, but for bigger businesses ... it's a bit different" in that larger companies are required to offer coverage (Carter, 3/30).

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