Health Reform: Impacts on Your Business

Recently enacted Health Reform Legislation requires businesses to provide employees with health coverage by automatically enrolling every employee in a health plan unless they opt out. How this will affect your business depends on the size of your company.

The Bad News? There will be penalties for failing to provide the requisite amounts of coverage. However, only businesses with 50 or more Full-time employees are subject to penalties and those penalties will not apply until 2014.

The Good News? Depending on the size of your business, whether you currently provide coverage to your employees and if you have fewer than 25 Full-time employees, you may be eligible for a tax credit in the current 2010 tax year.

The maximum tax credit a business can receive equals 35% of the employee premium expenses paid. The only businesses that will be eligible for the maximum tax credit are those with 9 or fewer full-time employees having an average wage that does not exceed $23,000 per year. If your business currently employees 24 or fewer full-time employees with an average wage of less than $50,000 you are still eligible for some tax credit. The amount of the credit will depend upon the amount of the premiums paid and whether your health plan meets certain qualifications.