Small Business Health Insurance Coverage Is More Affordable Under the Affordable Health Care Act

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With the changes in healthcare reform, small business owners need to evaluate and consider whether it is worthwhile to offer health insurance coverage to their employees. In the past, most small businesses were not required to provide an employer-sponsored program. However, with the new tax incentives, subsidies, and other features allowed under the Affordable Health Care Act, it makes it easier for small businesses to supply coverage. Providing an employee-sponsored plan helps to keep your employees happy and healthy. Because your employees are going to have access to affordable insurance, it will be there when they get sick, so they can recover and return to work faster.

Those small businesses which sign up and offer an employee-sponsored plan are entitled to tax incentives to help defray their costs. These incentives are taken off the cost of insurance premiums. Any remaining amounts are able to be divided between the employer and employee. For instance, if the remaining amount is $40 per week for individual coverage, including all 10 essential health benefits, the employer may elect to pay half of this amount and have their employee pay the other half through payroll deduction. On the other hand, the employer could decide to pay more, or even less. Starting in 2014, small businesses might qualify for 50 percent of insurance premium expenses in the form of tax credits. For tax-exempt organizations, this amount is going to be 25 percent. With these discounts, businesses with 50 or fewer full-time employees are going to see insurance savings that were not available in the past.