What Small Business Owners Need to Know Now ... And What to Prepare for by 2014

By Ryan Staib Posted : 05/18/2010

Effective January 1, 2010

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  • Up to 35 percent (50 percent in 2014) of the insurance premiums will become a tax credit for companies with no more than 25 full-time equivalent employees with average annual wages less than $50,000.

Effective 90 Days After Enactment (June 2010)

  • A temporary reinsurance program will reimburse up to 80 percent of the cost of benefits per enrollee exceeding $15,000 and below $90,000 for health coverage for early retirees and their families.

Effective Six Months After Enactment (September 2010)

  • Health insurance companies cannot exclude pre-existing conditions for children (and for adults in 2014), and dependent coverage can continue until age 26 in the absence of other health coverage.
  • Insurers cannot impose lifetime limits (or annual in 2014) on benefits.
  • Health plans must cover certain preventive services.

Effective January 1, 2011

  • Employers must disclose on W-2s the value of the healthcare coverage provided.
  • The additional tax for Health Savings Account withdrawals prior to age 65 that are not used for qualified medical expenses increases to 20 percent.
  • Small employers can provide tax-free benefits for certain medical and child care expenses to employees.

Effective January 1, 2013

  • Contributions to a healthcare reimbursement flexible-spending account are limited to $2,500 per year.

Effective January 1, 2014

  • Penalties may be imposed on employers of 50 or more full-time equivalent employees that do not offer health insurance or that only offer "unaffordable" coverage.

Health-insurance exchanges will be created at the state level. Initially, these exchanges will be open to individuals and small employers with 100 (or possibly 50) or fewer employees.

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