How Will The Health Care Bill Affect Your Business?

Health care reform legislation signed into law by President Obama has generated lots of questions from business owners about what the new law will mean to them.

“Even those people most involved in the debate have questions about how the bill will affect their businesses,” said Drew Gruenburg, chief operating officer of the Society of American Florists (SAF). “They wonder if premiums will go up or down. Who’s covered and who’s not? When does it all take effect? How will this affect their employees…family…customers? There are just so many unknowns at this point as the final regulations are being written.”

To answer some of these questions and help make sense of the law’s impact on employers, SAF details the provisions most likely to affect small businesses and when those changes will start to occur.

Employer Requirements

Effective: Jan. 1, 2014: In the strictest sense, the law does not force employers to offer health insurance. It does, however, assess a fee on certain employers of 50 or more employees under certain conditions.

Employers with fewer than 50 employees are exempt from the penalties described below.

Employers of 50 or more full-time equivalent employees who do not offer health insurance that have at least one full-time employee who gets subsidized health insurance through the exchange, will have to pay a fee of $2,000 per employee, excluding the first 30 employees. A full-time equivalent employee is one who works 30 or more hours a week.

Employers of 50 or more who offer health insurance and have at least one full-time employee who gets subsidized health insurance through the exchange will be required to pay the lesser of $3,000 for each employee receiving a tax credit or $2,000 for each full-time employee.

Employers with more than 200 employees are required to automatically enroll employees into health insurance plans offered. Employees may opt out of the coverage.

Tax Credits for Employers

Phase I (taxable years 2010, 2011, 2012 and 2013): If employers of no more than 25 full-time equivalent employees want to offer health insurance or already do — and if their employees have annual full-time equivalent wages that average no more than $50,000 — they are eligible for a tax credit. The tax credit is up to 35 percent of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50 percent of the total premium cost. The full credit is available to employers with 10 or fewer full-time equivalent employees and average annual full-time equivalent wages of less than $25,000. The credit phases out as firm size and average wages increase.

Phase II (taxable years 2014 and beyond): If small employers purchase coverage through a state exchange, a tax credit is available for up to 50 percent of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50 percent of the total premium cost. The credit is available for two consecutive taxable years. The full credit is available to employers with 10 or fewer full-time equivalent employees and average annual wages of less than $25,000. The credit phases out as firm size and average wages increase.

Tax-exempt small businesses meeting the requirements outlined above are eligible for tax credits of up to 35 percent of the employer’s contributions toward the employee’s health insurance premium.

Wellness/Reward Programs

Effective Jan. 1, 2014: The law provides grants for up to five years to small employers that establish wellness programs. Funds will be appropriated beginning in fiscal year 2011.

The law also permits employers to offer employee rewards — such as premium discounts and waivers of cost-sharing requirements among others – of up to 30 percent of coverage for participating in a wellness program and meeting certain health-related standards.

Health Insurance Exchanges

Effective: Jan. 1, 2014: The law creates the state-based American Health Benefit Exchanges and Small Business Health Options Program (SHOP) exchanges, marketplaces where individuals and small businesses with up to 100 employees can purchase coverage. The law restricts access to coverage through the exchanges to U.S. citizens and legal immigrants who are not incarcerated.

The law creates four benefit categories of plans plus a separate catastrophic plan. Health insurance plans participating in the exchange must meet certain requirements in marketing, customer service, provider networks and transparency. States have option to create a basic health plan for uninsured individuals with incomes between 133 and 200 percent of the federal poverty level. (The federal poverty level for individuals in 2009 is $10,830, and for a family of three is $18,310.) Businesses with more than 100 employees can begin purchasing coverage in the SHOP exchange in 2017.

Other Provisions

Individual Mandate: The law requires U.S. citizens and legal residents to have health insurance or pay a penalty.

Exemptions will be granted for financial hardship, religious objections, American Indians, those without coverage for less than three months, undocumented immigrants and incarcerated individuals.

The penalties for not having insurance will be phased-in according to the following schedule. The penalties are the greater of:

$95 or 1 percent of taxable income in 2014
$325 or 2 percent of taxable income in 2015
$695 or 2.5 percent of taxable income in 2016

After 2016 the penalty will be increased annually by the cost-of-living adjustment

Tax Changes: There are a variety of tax increases to pay for the new regulations. It is best to see your tax attorney or health insurance expert for details, but those dealing with Medicare and health insurance plans may of specific interest to you.

Medicare Part A: The law increases the Medicare Part A tax rate on wages by 0.9 percent (from 1.45 percent to 2.35 percent) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and imposes a 3.8 percent tax on unearned (investment) income for higher income taxpayers. The effective date is Jan. 1, 2013.

High cost insurance plans: The tax is on insurers of employer-sponsored health plans that cost more than $10,200 for individual coverage and $27,500 for family coverage. These costs will be indexed to the consumer price index beginning in 2020. The tax is equal to 40 percent of the cost of the plan that exceeds the threshold amounts. The tax is imposed on the issuer of the health insurance policy. In the case of a self-insured plan this is the plan administrator or in some cases the employer. The effective date is Jan. 2018.

Health Insurers: Several changes relate directly to health insurers, including the following:

Effective September 2010: Uninsured dependent children can be covered under a parents’ health insurance plan.

Effective now: Insurance companies cannot set lifetime limits on the dollar value of heath care coverage.

Pre-existing conditions: Effective September 2010 for children and in 2014 for adults, insurance companies can no longer deny coverage for pre-existing conditions.

Leave a Reply

More From Finance/Operations...
Lavandula 'Meerlo' (Sunset Western Garden Collection)

March 3, 2015

Why You Will Still Grow Today’s Big Perennial 10 Years From Now

What will be the next big perennial? Breeders say it takes more than a splashy plant to distinguish itself in the market. Therefore, the question is not what will be the next big perennial, but rather what perennial performs well enough in the garden to have staying power in the market for years to come.

Read More

March 2, 2015

Avoid Surprises On The Delivery Dock

A call in advance about problems with a plant shipment to a retailer you supply goes a long way toward customer satisfaction.

Read More
Janeen Wright

March 2, 2015

Deliver Plant Quality That Trumps Price [Opinion]

The industry's goal is to have loyal customers who return to the same plants time and time again, not because of price, but owing to a plant brand that shouts top-notch garden performance and is synonymous with excellence, which gives them the secure knowledge that their investment will be worth every hard-earned cent.

Read More
Latest Stories
IPPS Sharing Plant Production Knowledge Globally Logo

February 25, 2015

International Plant Propagators Western Region Sets Ann…

The annual meet for the International Plant Propagators' Society (IPPS) Western Region has been set for this September. It will take place September 23 to 26 in Modesto, Calif., and will include learning sessions, tours to local nurseries, a research poster display and poster presentations, various networking opportunities and an awards banquet to close the event.

Read More
myers industries Lawn and Garden Logo

February 24, 2015

Myers Industries, Inc. Lawn And Garden Business Sold, N…

The management of Myers Lawn and Garden Group, along with Wingate Partners V, L.P. have recently acquired the Myers Industries, Inc. Lawn and Garden business. The new company is named The HC Companies, and will continue as a North American leading provider of horticulture containers supplying the greenhouse, nursery and retail markets.

Read More
american-hort-logo

February 17, 2015

AmericanHort Announces New Board Members

AmericanHort recently announced the election of new officers and members to the board of directors. Each will assume their positions on the board during Cultivate’15, July 11 to 14 in Columbus, Ohio.

Read More
All American Selections

February 17, 2015

All-America Selections Elects New Officers, Names New J…

While meeting during the Flower and Vegetable Seed Conference in Tampa, Fla., hosted by the American Seed Trade Association, All-America Selections elected new officers for a two-year term. Read on to learn about the new officers, as well as all of the new judges that were added in 2014.

Read More
Greenhouse Grower.com on your desktop, on your phone, on your tablet

February 11, 2015

GreenhouseGrower.com Relaunches With Responsive Design …

Greenhouse Grower magazine, the nation’s leader in profits, production and education for greenhouse growers, announces the launch of its completely redesigned website, GreenhouseGrower.com. The new design is the product of direct user feedback and GreenhouseGrower.com analytics, and includes responsive design for ease of mobile use.

Read More
Andy Higgins

February 3, 2015

MasterTag Names Andy Higgins As Its New President

Former CEO and president of Ecke Ranch, Andy Higgins, joins MasterTag as its new president. He brings more than two decades of industry experience to the position.

Read More
Syngenta Bioline Hires Ronald Valentin For Technical Lead Role

January 28, 2015

Syngenta Bioline Hires Ronald Valentin For Technical Le…

Ronald Valentin has been appointed technical lead for Syngenta Bioline, effective January 2015. He will be responsible for technical support of Bioline biological control agents and will be instrumental in helping growers develop integrated pest management (IPM) solutions.

Read More

January 27, 2015

Give Equal Time To The Number Crunchers

Before investing in a new business opportunity, check in with the financial gurus of your organization to make certain you have the cash flow to back up your efforts.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 20, 2015

Bailey Nurseries’ Purchase Of Plant Introductions Inc. …

When Bailey Nurseries purchased its long-time breeding partner, Plant Introductions, Inc. (PII), in early January 2015, it freed the PII team to concentrate on what they do best: develop new plants. Bailey Nurseries will take on the business management side of the partnership, but otherwise the relationship it has enjoyed with PII for years will be largely unchanged.

Read More
Plant Introductions, Inc. partners Mark Griffith, Dr. Michael Dirr and Jeff Beasley and Bailey Nurseries President Terri McEnaney.

January 13, 2015

Bailey Nurseries Acquires Plant Introductions

Bailey Nurseries has acquired Plant Introductions, Inc. (PII), effective January 1, 2015. PII has developed numerous innovative new varieties that have been marketed worldwide, many introduced by Bailey Nurseries.

Read More

January 7, 2015

How Inflation Affects Your Business And Why You Can’t I…

Awareness of the true increase in costs after inflation is a necessary part of good financial management for greenhouse operations.

Read More

December 4, 2014

New Developments In Shipping/Logistics Software

Improved shipping and logistics software from Picas Software and MapMechanics makes it easier for growers to plan loads efficiently and automate day-to-day distribution planning.

Read More
Fritz Dramm

December 2, 2014

Dramm Corporation Welcomes Back Fritz Dramm

Dramm Corp. recently welcomed Fritz Dramm as the new fertilizer production and compliance manager. Dramm previously worked at the company through high school and college, and is back after 20-plus years.

Read More
Sarah Harwood

November 24, 2014

Take Control Of Your Operation’s Succession Planning Pr…

Proper business and estate planning with your intentions clearly expressed can ensure your goals for the future of your business are fulfilled.

Read More

November 24, 2014

Succession Planning For Growers

Succession planning is a sensitive subject, but one that needs to be addressed when deciding on your operation's legacy. Greenhouse Grower caught up with two growers who shared their process and provided tips for a smooth transition.

Read More

November 24, 2014

BrightFarms Pioneers Hydroponic Greenhouses For Urban A…

BrightFarms brings fresh, local produce to underserved areas with hydroponic greenhouses located on neglected urban spaces.

Read More

November 10, 2014

NGB, AFE To Join In #GivingTuesday On December 2

The American Floral Endowment will participate in #GivingTuesday on December 2, a national movement to encourage charitable giving.

Read More

November 8, 2014

Amid Drought, Californians Talk Water

As extreme drought conditions continue, the state looks at how it manages its resources, while growers try to conserve and meet changing consumer needs.

Read More