YOU ASK:

How does Obama's health insurance plan impact small businesses paying for medical insurance?

WE ANSWER:

If you own a small business, you need not fear that the new healthcare reform bill will close your business because you will be forced to buy insurance for your employees. On the contrary, you will be granted with tax credits so that you will afford to buy coverage. This is because historically, small businesses pay more to provide coverage for their employees as compared to the costs that bigger businesses have.

The healthcare reform bill will require big businesses (those who have over 50 full-time employees) to provide coverage for their employees. In fact, they will be paying considerable fines when they don't fulfill the requirement.

In contrast, the bill will provide benefits for the small business. Here are three:

  • Tax credits will help pay for insurance premiums for your employees. You can enjoy up to 35% of the premiums you pay as your tax credit. By 2014, the tax credit will increase to up to 50% of the premiums that you pay.
  • The bill will enable your business to get coverage through a health insurance exchange, which are projected to provide cheaper insurance coverage. This is because the exchange enables small businesses to put their resources along with other small businesses, which will give them more buying power, less exposure and less risk.
  • Buying insurance from a health insurance exchange will also lower your business' administrative expenses with regards to health insurance coverage. The health insurance exchange will make it easier for your HR to look at benefits, premiums and the overall product offering from various health insurance providers.

Now, if you really can't afford to provide your employees with coverage, they can be eligible for tax credits themselves, which they can then use to buy the coverage they need.

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