Small Business (Less than 50 employees)
Near-Term Impacts of Health Care Reform
Near-Term Impacts of Health Care Reform
The health care reform law has many separate provisions that come into effect at different times over the next eight years.
Some of the most important provisions affecting small business - generally those with 50 or fewer employees - are listed below. Unless otherwise noted, each provision will be effective on new and renewing plan years starting on or after September 23, 2010.
Policies that were in effect when health care reform was enacted on March 23, 2010, may be granted grandfather status. They're exempt from many of the law's near-term and long-term requirements, and other requirements apply to them differently. Learn more about grandfathered plans.
Pre-Existing Conditions
Children under the age of 19 can no longer be excluded from health insurance or made to wait for health insurance because of a pre-existing condition.
Extended Dependent Coverage
Dependents of employees remain eligible for coverage on their parents' coverage until they turn age 26, regardless of marital status or whether they're in school. For grandfathered plans, these dependents can be dropped if they become eligible for insurance from another source, such as their own employer.
No Salary Discrimination
Employers cannot favor highly compensated employees by offering them different coverage levels or different premium costs.
No Lifetime Limits
The law defines certain health care benefits as essential. Under health care reform, insurance plans are no longer allowed to put a cap on how much of these benefits a person can receive during his or her lifetime.
Preventive Care
The new law requires health insurance plans to cover 100% of the costs of certain preventive care and health screenings which are intended to help people stay healthy and avoid more serious and costly treatments later in life.
Restricted Annual Limits
From now until 2014, health insurance plans are allowed - with some restrictions - to limit the dollar value of essential benefits that each covered person may receive each year. From 2014 on, there can be no annual limit on essential benefits. Plans may continue to limit other benefits, however.
Temporary Reinsurance
For people who retire at age 55 or older, but aren't yet eligible for Medicare, the federal government will offer a temporary reinsurance program to help employers continue their coverage. The funds for this $5 billion program are likely to be exhausted quickly. Eligible employers can apply for the program through the US Department of Health and Human Services.
UPDATE: As of May 5th 2011, DHHS is no longer accepting applications for this program due to lack of funding.
Web Portal
Beginning July 2010, the government operates a website to help people learn more about health insurance and health care reform. When health insurance exchanges become active in 2014, people will be able to use this website to shop for and buy health insurance.
Small Business Tax Credit
Between 2010 and 2013, businesses with fewer than 25 full-time equivalent (FTE) employees may qualify for tax credits if:
- They contribute to their employees' health insurance
- Their employees' wages average less than $50,000
Depending on the company's size and the average salary, the tax credit can be much as 35% of the employer's costs (25% if the company is tax-exempt), on a sliding scale.
© 2012 Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association.