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Obamacare & The Self-Employed

Health Care Reform

Do the words “health reform” and “employer mandate” frighten you? If they do, you’re not alone. But what does health reform really mean for the self-employed today, and what will it mean for your bottom-line?

Many small business owners are confused about their responsibilities under the Affordable Care Act. A recent survey of small businesses conducted by eHealthInsurance found that a third (33.6%) believed they would be required to provide health insurance for their employees, and another third (35%) weren’t sure. A similar number of respondents believed they may face tax penalties for not providing group health insurance coverage.

You probably won’t have to provide health insurance to your employees.

In fact, of the more than 400 small business owners surveyed by eHealthInsurance, only two would be required by the health reform law to provide coverage to employees in 2014, or face a tax penalty for not doing so.

Three Things Small Businesses Should Know about Health Reform

Small business owners may not agree with certain provisions of the Affordable Care Act, but many will find the requirements of the law less burdensome than they fear. Some may even find that health reform provides them with new tools, resources, and a higher degree of flexibility when it comes to hiring and retaining the best workers.

Health InsuranceSelf-Employed? Own a Small Business? Then you need affordable health insurance. And there is no better place to shop for it than with
our friends at eHealthInsurance.

There are three key things that small business owners today should know about health reform:

  • You probably don’t have to provide health insurance to your employees
  • If you do provide health insurance for employees, you may qualify for special tax breaks
  • If you can’t afford to provide health insurance, your workers need not go uninsured

Let’s look at each of these in more in detail.

Most Small Businesses Not Required to Provide Health Insurance
Starting last January, businesses with fifty or more full-time workers (or the equivalent in part-time workers) will be required to provide health insurance for their employees. This is the so-called “employer mandate.”

Employers who meet this criterion and do not provide coverage for workers will face tax penalties that are triggered when employees turn to a state health insurance exchange to purchase coverage on their own. Companies that provide employees with especially rich health insurance benefits (“Cadillac plans”) will be required to pay an extra tax.

However, the vast majority of small businesses today have substantially fewer than 50 full-time workers and will be exempt from the employer mandate when it comes into effect. Like today, they will be free to provide health insurance to workers or not. And they will not face any tax penalties for not providing coverage.

Tax Breaks for Small Businesses Providing Coverage
Small businesses that do opt to provide health insurance may be eligible for special tax deductions. If you’re a business owner with no more than 25 employees and the average annual wages you pay them are less than $50,000, you may be able to deduct up to 50% of the amount you contribute towards employees’ monthly premiums. Talk to your accountant to learn more.

Also this year, owners of small and mid-sized business (with 100 or fewer workers) will be able to turn to government-sponsored online health insurance exchanges where they can get quotes from competing health insurance companies and enroll in the plan that best meets their needs and budget.

Help for Workers without Employer-based Coverage
We all know that health insurance just isn’t affordable for some small business owners. And while the increasing cost of employer-based coverage has slowed in recent years (it went up a relatively modest 7% in 2012, according to the Kaiser Family Foundation), it’s not likely to start going down anytime soon.

The good news is that small business owners who find they still can’t afford a group health plan won’t have to worry about their workers going uninsured – with all the risks to personal health and company productivity that might entail. Employees can now buy their own insurance at Healthcare.gov.

Article courtesy of eHealthInsurance.

  • sodakhic

    What a joke.Sorry, according to the SC this is a TAX, not a mandate. who writes this crap? 35% of this, 400% of that, 15% of the 25% that you don’t, and 75% of what you do. Obama said premiums would go down $2500, um LIE, they went up $2500. Lie of the year!!! Take comfort in knowing your worst fears won’t come to pass in 2014. Hahahahahahahahahahahahahahahahahahahahahahahahahaha

    • Ellen K

      I pay almost as much for my insurance as I do for the mortgage on my modest home. For that I have a $5000 deductible and my doctor charges such high office visit fees that I can’t afford to go until I am already so sick that I need to be admitted. That it the new middle class reality. Why does Obama hate us so?

  • jlbs

    It probably isn’t completely written yet. I swear they add things as they go along, depending on how the public reacts.

  • http://www.facebook.com/jallantaylor Jeffrey A Taylor

    hahahaha 400% below the federal poverty level? What is that? I think they were referring to 400% of the poverty level – i.e. 4 times the poverty level – or $100,000 a year for a family of four. yea, big help buddy.. thanks!!

  • Ellen K

    So which Obama operative wrote this tripe? They leave out some big issues. For example, my 28 year old newly married daughter had to get private insurance for which she pays $140 a month with a $10000 deductible. It is all she and her husband can afford along with his insurance through work. They tried to consolidate policies, but instead of the $280 in total, the price as a couple jumped to nearly $500 a month-a price they can’t pay while paying off student loans. What is more, the policy my daughter carries covers birth control and even abortion BUT NOT PREGNANCY. So while 15 year old illegal aliens can run to Parkland in Dallas and give birth for free, my educated daughter and her husband who is a therapist working with autistic kids, both of whom would be great parents, cannot afford the $14K they would have to come up with up front. There’s your real War on Women. Please spread the word, private policies are not covering pregnancy.

    • Marc Jordan

      Ellen, based on what you wrote here you and your daughter should actually embrace Obamacare since it will cover all of the conditions that you said were excluded from your daughter’s current policy, especially maternity. In addition, she will be paying a considerably lower deductible (if any). Her premium may go up but not by much since various carriers will be vying for her business.

      If there is one thing that the administration is guilty of it’s not getting word out on what to expect. Judging by what you wrote, it sounded like you were under the impression that coverage will be worse than what your daughter has when the reality is that ACA policies will be more comprehensive than a lot of coverage that people are walking around with.

  • http://www.facebook.com/kagen.aurencz.zethmayr Kagen Aurencz Zethmayr

    This article really says nothing at all about how Obamacare affects the self-employed specifically and personally. Either come up with the relevant feature or change the headline.

    • mirawithanh

      You took the words right out of my mouth!

  • Fred

    Obamacare is a monumental assault on an individual’s right to free choice.
    This dictator should be thrown in jail!

  • http://www.facebook.com/profile.php?id=100004489330334 Jessica Simpson

    I guess a lot of you say “Let them eat cake”. Compassion for others somehow has been lost. Any one who wants to see people die on the streets or in pain because they have no health insurance should bow their head in shame.