Small businesses across North Texas soon will be eligible for tax breaks and incentives to help them comply with new Affordable Care Act-mandated rules, U.S. Health and Human Services regional director Marjorie Petty said Wednesday in Dallas.
Healthcare reform was the front-running topic of a lengthy lunchtime discussion Wednesday during which Petty addressed the implementation of the Affordable Care Act and its health insurance exchanges. Petty cited the 48.6 million uninsured Americans and 17.9 percent of economic output currently tied up in the healthcare system as key indicators of the critical problem. Without reform, she said, a third of total economic output will be tied up in the healthcare system by 2040. Additionally, Dallas and Tarrant counties (which HHS groups together as one entity in its reporting) are the most severely affected on the list of Texas Marketplace Priority Cities, with 847,692 individuals—or 24 percent of the population—currently uninsured.
So how will the act impact small business in North Texas? Beginning in 2014, all individuals will be required to purchase health insurance, and those businesses with more than 50 full-time employees will be required to contribute towards employee health coverage. More than 96 percent of employers falling in this category already offer health insurance. But for smaller businesses that employ fewer than 50 workers—63 percent of which currently offer health coverage—the requirements are different.
Aaron H. Steele, senior stakeholder liaison at the Internal Revenue Service, joined the seminar by phone from New Orleans, La. He outlined the Small Business Health Options Program, which allows small businesses employing fewer than 50 and small tax-exempt entities to use the Marketplace to shop for health insurance for their employees and subsequently offer health plans that suit both the needs and budgets of workers. The SHOP provides small-business employers a level playing field compared to larger businesses by establishing access to better choices of plans and insurers at a lower cost. The accompanying tax credit for small-business employers who offer coverage through SHOP is intended to help those employers foot the cost of such an offering.
“Small business and tax-exempt employers with fewer than 25 full-time employees that offer insurance to their employees through the SHOP—they have to use the SHOP—may be eligible to claim the small business tax health care credit on their tax returns for the coverage purchased,” Steele said. “This credit helps the smallest employers and tax-exempt organizations afford the cost of affording health insurance coverage to their employees. What it also does is encourage small employers to offer health insurance for the first time, or to maintain the coverage they are already paying.”
Despite the extensive literature found on the HealthCare.gov and IRS websites, plenty of details and specifics of the ACA have yet to be finalized. For example, Petty couldn’t comment on just how many plans will be available for comparison on the Marketplace; that data won’t be available until Sept. 9. Additionally, Steele wasn’t able to answer with certainty whether it is the employer’s or federal government’s responsibility to notify employees who refuse coverage of the consequential tax penalty they will have to pay.
Is it plausible, then, for the act to accomplish all the things it says it will? Yes, Petty said: extending coverage to young adults up to age 26, as well as strengthening Medicare benefits for those over age 65 with lower prescription drug costs and free preventative care, are a start. Additionally, the ACA will prohibit plans from imposing lifetime and annual limits on the dollar value of benefits, or rescinding coverage when people get sick.
“Our goal is for all Americans to live healthier, more prosperous, and more productive lives,” Petty said.