AFFORDABLE CARE ACT FOR SMALLER FIRMS AND SOLE PROPRIETORS

healthcare reformI’m sure you are sick of this issue, regardless of your point of view. I know I am. But like it or not, it’s not going away.

The latest hooha is about some folks whose coverage has been cancelled. As a long time insurance professional, I can tell you this happens all the time. It’s not new to the PPACA world. It’s getting all the media attention this week, but it really only impacts a few percentage points of the 10% of those insured privately, and not under an employer plan.

And then there is all the talk about how the implementation of the PPACA will destroy jobs and small businesses. Remember, 97% of all business enterprises across the country employ fewer than 50 people.

If you employ less than 25 or are self-employed, you may find that the Affordable Care Act may bring you tax relief.

Companies with less than 25 employees that pay the majority of health care premiums for their workers qualify for a tax credit up to 35% of their premiums. (In 2014, that credit could be as great as 50% of premiums if you arrange insurance via one of the Small Business Health Options Programs, or SHOP Exchanges). The tax break you get will depend on the number of employees you have and their average salary.

However, this tax break won’t be offered to sole proprietorship’s. That factor may encourage you to incorporate or become an LLC.

Many of you know I support the ideas behind the PPACA. I’m dismayed by the problems encountered by people trying to log on to the government website. Their efforts to find out about their choices and costs and ultimately sign up have encountered huge technical problems. This tells me that whomever was responsible for getting the system up and running was probably a bureaucrat and not a successful entrepreneur in web site development.

What it also tells me is there is a huge number of people out there who want health insurance, either can’t get it from traditional sources, or for whatever reason, have chosen to go without and want an alternative. That alone should shape the response of the House of Representatives to one of trying to fix the problem instead of screaming that the PPACA will destroy America as we know it. How do stupid clowns get elected anyway?

Do you have questions about how the Affordable Care Act will affect your business? Remember, if you are an active member of Spiegel & Utrera, P.A.’s General Counsel Club, you can call 800.734.9900 to seek legal advice, strategic business, credit or tax advice.

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