Health Insurance for Small Business

Dear Professor Bruce:I have a bookkeeping service serving a small city of about 120,000
people.  I’ve heard that the healthcare reform law when it’s fully
implemented in 2014 will drastically impact self-employed people and small
businesses. I am concerned about this and need to know more. Can you tell me
how the reform law will affect my business and what should I be doing now?

According to  Anthony Lopez, small business insurance specialist, ““The law may affect you personally in several ways, but it’s less likely to affect your business than you might fear”.

First, let’s clarify a few things:

Beginning in January 2014, 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. However, the vast majority of self-employed persons and small businesses owners have substantially fewer than fifty full-time workers and will be exempt from the
employer mandate. Just 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.

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 what you contribute towards their monthly premiums, starting in 2014.

In that respect, at least, health reform may actually help small businesses who decide they want to provide group health coverage.

Now, how will the law affect you personally in 2014?

Well, like most everyone else, you’ll probably be required to purchase health insurance, assuming you don’t already have coverage througha spouse’s employer. This is the “individual mandate.” If you earn more than 133% of the Federal Poverty Level, you’ll need to purchase an individual or family health plan, or else face a penalty on your federal taxes.

Subsidies may be available to help you afford that coverage. If your income falls between 133-400% of the Federal Poverty Level in 2014, the government will see to it that you’ll pay no more than 3-9.5% of your income on health insurance premiums.

In order to receive the subsidy, make sure you buy your 2014 health plan through your state’s official health exchange website, or a qualified health insurance broker designated by your state exchange.

For further information, please visit,




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