2010 Health Care Legislation: a timeline for small businesses
Full text Patient Protection and Affordable Care Act (Health Care Bill)
If you have 25 or fewer full-time equivalent employees, who earn $50,000 or less annually, and you provide
them health care coverage, you can get a tax credit up to 50% of your contribution to their health care costs.
- This 50% tax credit is reduced if you have more than 10 employees or their average wages are more than $20,000 per year.
- The tax credit does not apply to owners or their dependents
- Non-profits receive 35% instead of 50% and their credit is taken against payroll tax rather than income tax.
- Employers must pay at least 50% of the premium. The tax deduction is on the employer's contribution only.
- For the full text, visit pages 120 to 124 in the Health Care Bill.
Small businesses with under 100 workers that institute wellness programs can receive a government grant for five years
to partially offset their costs.
- The amount of the grant has not been determined.
- Wellness programs must have health education, preventive screenings, health risk assessments, ways to encourage employee participation, initiatives to change unhealthy behavior, and a supportive work environment.
- For the full text, visit pages 859 to 860 in the Health Care Bill
Health savings accounts (HSAs) for workers will be replaced by a Simple Cafeteria Plan which will be available to small businesses with 100 or fewer employees.
- Employers are not required to offer a simple cafeteria plan; it is only an option
- Employer contributions to the cafeteria plan must be at least 2% of the employees' compensation.
- The simple cafeteria plan does not have to be offered to employees with less than one year service
- For the full text, visit pages 756 to 758 in the Health Care Bill
2012: REPEALED: All businesses will have to issue 1099-M forms for any business that they have paid $600 or more for services and $5,000 or more for
- Previously, businesses did NOT have to issue 1099-M forms for corporations. This means that businesses must obtain the federal EIN number for
all their vendors.
- For the full information, see page 737 in the Health Care Bill.
2013: The employee portion of Medicare tax for high income earners -including business owners paying Social Security self-employment tax -
will increase to 2.35% of wages above $200,000 ($250,000 if married). The employer portion of Medicare tax stays at 1.45%. (see pages 752-3, amended by page 902)
Sole proprietors, partnerships and LLC business owners pay Social Security self-employment tax.
State-based insurance exchanges will be available to small businesses and individuals. Businesses
with 50 or more employees will be required to provide health coverage. Individuals with income between 100% and 400% of the federal
poverty line will be eligible for premium assistance, which will be paid directly to the insurers.
- For the full text, visit pages 171 to 173 in the Health Care Bill
- Information on requirements for businesses with 50 or more employees begins on page 134.
- Information on premium assistance begins on page 95.