The Obama health plan is a bit of a departure from our normal topics, however it is rather relevant as most HVAC companies fall into the category of small business effected by this.

The new Health care reform will have a major impact to any small business or contractor, many of the items will give your employees some major benefit improvements with out hitting us which is great.  That aside I wanted to take a closer look at the items most likely to effect our bottom line as a small business.

Breaking this out by year and what will go into effect that year.

2010

• Small businesses with less than 25 employees and average wages of less than $50,000 will qualify for a tax credit of up to 35% of the cost of the health care premiums for workers
• Children up to the age of 26 can remain on their parents’ health plan unless they have options through their own employer
• Health plans will not be permitted to exclude children under the age of 19 due to pre-existing medical conditions
• A temporary re-insurance program will be created to help offset the costs of health claims for employers that provide health benefits for retirees age 55 to 64.

2011

• Health plans in the individual and small group markets will be required to spend 80% of premium dollars on medical services.  Plans in the large group market will be required to spend 85%.
• Employers will be required to report the value of health benefits on employee W-2 forms

2013

• Contributions to health care flexible spending accounts will be limited to $2,500 per year.
• A new 3.8% tax will be imposed on investment income for individuals with AGI in excess of $200,000 and couples with AGI in excess of $250,000

2014

• Health plans will be prohibited from imposing annual limits on benefits
• Health plans will be prohibited from denying coverage to adults for preexisting medical conditions and the state high-risk pools will be phased out as it will no longer be needed
• Small businesses with less than 25 employees and average wages of less than $50,000 will be able to qualify for a tax credit of up to 50% of the cost of the health care premiums
• People earning up to 133% of the federal poverty level ($29,327 for a family of four) will qualify for Medicaid
• People earning up to 400% of the federal poverty level ($88,200 for a family of four) will qualify for subsidies on a sliding scale to purchase health insurance through the newly created insurance exchanges
• Most U.S. citizens will be required to buy health insurance or pay a penalty, there are some exceptions
• Employers with more than 50 employees that do not offer health coverage will be fined if even one one employee uses tax credits to purchase an individual plan

Year 2018

• A 40% excise tax will be imposed on health insurance plans costing more that $10,200 for an individual or $27,500 for a family, not including vision and dental plans. Higher thresholds will be available for some high risk industries.

For the small business it’s really how you want to look at it.  Yes we will have some extra costs, however for the first time we will be able to offer health plans like larger companies which might broaden the pool of folks interested in working for a smaller company.

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