Now what?

The largest transformation of health insurance in our nation’s history was passed in March by the Democrats and President Obama. If you are familiar with my previous posts you will know that I am against most of the “reform” that was passed in this law because I know it will increase our insurance premiums substantially and reduce our choice. With that said–what’s done is done. There will be legal challenges and efforts to repeal the law but until that happens–the bill is the law of the land.

I want to make sure you understand the changes and how they may effect you, your family, and your business. This health care law is huge (2700+ pages) and there are many changes–therefore I will be posting a series of articles that inform you of the changes in the order that they take effect.  I will only be posting the changes that effect your health insurance.

IMMEDIATE CHANGES

1) Grandfathered Plans:  If individuals and groups want to keep their current plan –they can do so only if they do not make any changes to their plan.  The only acceptable changes they can make and keep their plan is if they add or delete members to the plan.  So, if you want to change a copay, deductible, coinsurance, etc…even if you stay with the same insurance company, the “new plan” will have to be compliant with the new federal mandates.  This effects all Utahans because over time everyone will make a plan change of some kind and have to purchase a federally compliant health plan with the new federal mandates (even if you don’t want them).  Health insurance mandates add to the cost of the health plan–so this is one way Utahans will pay higher costs. 

2) Small Employer Tax Credits:  Makes available tax credits for qualified small employer contributions to purchase coverage for employees. Begins retroactive for premiums paid in taxable years beginning after December 31, 2009.  In order to qualify, the business must have no more than 25 full-time equivalent employees, pay average annual wages of less than $50,000 and provide qualifying coverage.

The full amount of the credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000, and will phase out when those thresholds are exceeded. The average wage threshold for determining the phase-out of credits will be adjusted for inflation after 2013. Small employers will receive a maximum credit of up to 50% of premiums for up to 2 years if the employer contributes at least 50% of the total premium cost. The credit would phase out entirely for employers of more than 25 employees whose average annual salaries exceeded $50,000. If you have a business that meets this critera–make sure you contact your CPA and take advantage of this tax credit.  There are some exclusions to the credit.

Employers will not be eligible to use the credit for certain employees, including defined “seasonal workers,” self-employed individuals, two percent shareholders of an S corporation (as defined by section 1372(b), five percent owners of a small business (as defined by section 416(i)(1)(B)(i)) and dependents or other household members. However, leased employees are eligible employees for the credit. Employers receiving credits will be denied any deduction for health insurance costs equal to the credit amount.

To check out my video blog on the subject please see below.  I look forward to your comments and questions. Look for my future posts!