The Supreme Court came down with its decision regarding the much-debated health care law or “Obamacare.” Many of our customers are small, medium, and large-sized firm owners who will be affected by this decision. As such, we wanted to break down how the Supreme Court’s decision might alter the way you run your office and take care of your employees.
Surprising many, Chief Justice Roberts joined the more liberal Supreme Court members to declare that “the Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax.” Further, “because the Constitution permits such a tax, it is not our [the Supreme Court’s] role to forbid it, or to pass upon its wisdom or fairness.”
The health care law seeks to “create insurance exchanges for those buying individual policies and prohibit insurers from denying coverage on the basis of pre-existing conditions” and will cost an expected $938 billionover 10 years. The costs of the health care program will in part be paid for additional taxes. Individuals making more than $200,000 a year and couples earning above $250,000 will get new payroll taxes along with a 3.8% tax on investment income. Additionally, all taxpayers will have to spend more on unreimbursed medical care before they can claim itemized deductions.
If you own your own business, here are a few mandates from the Health Care Reform Act that you can expect to take on:
- Mandate to provide coverage or pay fines (firms with less than 50 employees not subject to mandate).
- Mandate to cover specific benefits in the small group market.
- New small-business tax credit to purchase coverage.
- New insurance exchanges for the small employer and individual markets.
- Limits on underwriting.
- Elimination of tax deduction for retiree drug subsidies.
- Restrictions on flexible spending account (FSA) salary deferral contributions.
- Existing plans grandfathered as of date of enactment from some, but not all, of the new plan requirements.
If a business chooses not to offer employee health plans, the Affordable Care Act’s employer mandate stipulates a $2,000 per-employee penalty beyond the first 30 employees. Interestingly, some have noticed paying this fine may actually be cheaper than offering health coverage.
Business owners and individuals have until 2014 to comply, when the Act goes into effect. No doubt there will be much more discussion on this matter over the next two years. Attorneys Corporation Service, Inc. will keep you abreast of the issue.
Attorneys Corporation Service, Inc. provides help with all incorporation the forms you need to handle incorporating a new business. We cover new government mandates and can keep you updated on the any new forms you will need to comply with changing business law. Call us at 800.462.5487 or check us out online at AttorneysCorpService.