JCHS IPE 300

Small Business Owners

-Patient Protection and Affordable Care Act was formed to help reduce the costs of coverage for small businesses.

-Small Business Tax Credits: Small businesses have long paid a premium price for health insurance- often 18% more than larger employers. The tax credit will benefit an estimated 360,000 small employers who will receive the credit. (A More Secure Future).

-Small businesses that provide health coverage for their employees are eligible for a credit. Employers with 10 or fewer employees and average wages or less than $25,000 will get 100% of the credit; for other eligible employers, the credit will be reduced based on the number of employees over 10 and the excess of the employees' average wages over $25,000. (Nevius, A. 2010).

-SIMPLE cafeteria plans for small businesses. The Patient Protection Act establishes a SIMPLE cafeteria plan for small businesses. Under the provision, an eligible small employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan, including group term life insurance, benefits under a self-insured medical expense reimbursement plan, and benefits under a dependent care assistance program. Under the safe harbor, a cafeteria plan and the specified qualified benefits are treated as meeting the specified nondiscrimination rules if the cafeteria plan satisfies minimum eligibility and participation requirements and minimum contribution requirements. (Nevius, A. 2010).

-The ACA markedly increases the federal role in small and non-group markets. This is reflected in federal-level insurance regulations designed to make coverage more affordable regardless of purchase location. (Miller, E. 2011).

-Another key provision to increase health insurance affordability for small businesses is the availability of federal tax credits. (Nevius, A. 2010).

-The credit covers up to 35% of the employer's contribution; the full credit increases to 50% by 2014. It is estimated that the federal government will devote $40 billion to the small business tax credit over the next ten years (Congressional Budget Office 2009b). (Nevius, A. 2010).

-Under the health care law, employer-based plans that provide health insurance to retiree ages 55-64 can now get financial help through the Early Retiree reinsurance Program. This program is designed to lower the cost of premiums for all employees and reduce employer health costs. (Newsroom, 2011).

-In 2014, small businesses with generally fewer than 100 employees can shop in an Affordable Insurance Exchange, which gives you power similar to what large businesses have to get better choices and lower prices. An exchange is a new marketplace where individuals and small businesses can buy affordable health benefit plans. (Newsroom, 2011).

-Employers with fewer than 50 employees are exempt from new employer responsibility policies. They don't have to pay an assessment if their employees get tax credits through an Exchange. (Newsroom, 2011).

-Tax credit and subsidies available to help employers provide insurance for their employees.

-Small business owners know employees view health insurance as the most desirable benefits they can offer.

-It is fundamental that everyone should be able to obtain necessary health care. Unnecessary barriers to health insurance need to be removed.

The National Small Business Associated has listed its top priority Health Care Reform

Small businesses state that they face different challenges than those of large firms and are at a disadvantage, one of their hopes for health care reform is to diminish those disadvantages and continue to create jobs and assist the economic growth (Small Business Priorities, 2009, p.10).

-Reform will bring down costs for small businesses by creating a health insurance exchange which pools small business and their employees with millions of other Americans to increase competition in the insurance market. (Report Highlights Need for Health Care Reform, 2010 p.26)

-Reform would provide a small business tax credit for an estimated 3.6 million small businesses nationwide and end the “hidden tax” of more than $1,000 added onto every family policy that covers the cost of care for those without insurance.(Report Highlights Need for Health Care Reform, 2010 p.23)

-Health Care Reform will prevent premium hikes for small businesses.

Reform will also ensure employers and employees have stable, insurance coverage, and limit out-of pocket spending.

References

A More Secure Future. Retrieved from http://www.whitehouse.gov/healthreform/healthcare-overview.

Du, L. (2012, September 1). Health care law's impact on small businesses. Newsday, (Melville, NY).

Miller, E. (2011). Affordability of Health Insurance to Small Business: Implications of the Patient Protection and Affordable Care Act. Journal Of Health Politics, Policy & Law, 36(3), 539-546. (n.d.). Retrieved from http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers

Nevius, A. (2010, May). Health Care Reform Reshapes Tax Code. Journal of Accountancy. Vol 209. Retrieved from http://ehis.ebscohost.com/ehost/detail?vid=4&hid;=20&sid;=4c914f29-5ea2- 4547-bd41-06a...

Newsroom. Retrieved from http://www.healthcare.gov/news/factsheets/2011/08/small-business.html

Report Highlights Need for Health Care Reform. (2010). O&P;Business News, 19(1), 24-26. 78-1271225

Schoen, C., Davis, K., & Collins, S. (2008). Building blocks for reform: acheiving universal coverage with private and public group health insurance. Health Affairs, 27(3), 646-657.

Small-Business Priorities. (2009). Financial Executive, 25(3), 10.

Thomas, N. (2010). Compliance Matters. The Small Business Health Care Tax Credit: does your practice qualify? PT In Motion, 2(10), 44-46.

Tax payers, you have made some interesting points about the new healthcare reform laws. One that I really find interesting is in regards to a "violation of our ability to make our own decisions to buy or not buy insurance. It is the belief of group 5 (Small Business), that all Americans should have health insurance. The millions of people without health insurance are not without because they are exercising their constitutional right to do so, they either can't afford private insurance, insurance is not offered by their employer, or the insurance offered is too expensive.

Excessive growth of health care costs is by far the largest contributor to our fiscal stress and inability of middle class to get ahead or improve their lifestyle. In 2004 the estimated total costs of care for uninsured Americans was almost $125 billion. The new tax reform law will not only insure that all Americans have health insurance, but it will also decrease taxes for mid and lower class Americans. The new reform strategy has been geared to prevention of illness and promoting wellness by population health management, outcome based payment, accountable care organizations, and evidence based practice (EBP), all of which will decrease the amount of ER, doctors office, specialty services needed, and duplication of care that will in turn save millions of dollars in health care per year.

• There is also a tax credit for small businesses.

• It is estimated that the federal government will devote $40 billion to small business tax credit over the next ten years (Congressional Budget Office 2009b).

Reference

Miller, E. (2011, Jun). Affordability of Health Insurance to Small Business: Implications of the Patient Protection and Affordable Care Act. Journal of Health Policies, policy & Law, 36(3), 539-546.

http://www.kff.org/uninsured/upload/The-Cost-of-Care-for-the-Unisured-What -Do-We-Spend-who-Pays-and -What -Would-Full-coverage-Add-to-Medical-Spending.pdf.

Carlson, J. (2012), Clarity at last. (cover story). Modern Healthcare, 42(27), 2-02.

Romer, C. D. (2012, July 22). Only the First Step In Containing Health Costs. New York Times. p6.

Thomas, N. (2010). Compliance Matters, The Small Business Health Care Tax Credit: does your practice qualify? PT in Motion, 2(10), 44-46.

You have made some very valid points regarding the Affordable Care Act from insurance executives point of view. You state that private insurance companies will be forced to provide coverage for more people, some with pre-existing conditions. Though this may be true, there are tens of millions of uninsured Americans and that number continues to grow. These Americans are not getting treatments and are non-compliant with medication regimens simply because they can’t afford it. More than 70% of these Americans lack insurance because they simply cannot afford it. It is very possible many of these pre-existing conditions occurred because these Americans were unable to afford preventative and diagnostic health care to even find out that that had a pre-existing condition. Will the profitability of the sector decrease that much with the addition of millions of Americans gaining health insurance? Not only will the sector receive profit form the addition of all the new insured Americans, the new insured Americans will hopefully be more likely to be more compliant with needed medications and treatment plans in which the insurance companies will get reimbursed for.

Another point made stated that many small companies will go out of business. The health care reform is a huge supporter for small businesses. Small insurance companies may not be able to significantly increase their premium rates, but there is a huge opportunity for these small businesses to flourish, create jobs and assist in economic growth. The Affordable Care Act hopes to get every American insured. There will be the possibility of millions of patients needing insurance. (Small Business Priorities, 2009, p.10)

You state that this act will have a trickledown effect on insurance carriers. Those clients will be unhappy and will leave without coverage. Though some financial changes will be made, Americans will still receive health care and insurance companies make profit from this. Once these uninsured Americans receive insurance they are able to partake in preventative, diagnostic, therapeutic and maintenance health care that they weren’t able to before.

In addition many insurance carriers have already stopped paying for hospital acquired infections and pressure ulcers. The cost that goes along with these illnesses is tremendous. Insurance companies are gaining profit placing for this on hospitals.No downward spiral is foreseen, only better healthcare for those not able to receive it.

The Affordable Care Act isn’t a fool proof way to fix the healthcare problem. It is a step in the right direction. The intentions of the Act are intended to benefit Americans. It is important to remember there will always be change and with that means learning new ways to embrace the opportunities we are given.

References

Arrow, K., Auerbach, A., Bertko, J., Brownlee, S., Casalino, L. P., Cooper, J., & ... Jost, T. (2009). Toward a 21st-century Health Care System: Recommendations for Health Care Reform. Annals Of Internal Medicine, 150(7), 493-495.

Rethmeier, K. A. (2010). Innovation for healthcare reform: Creating opportunities to explore expand and excel. Journal Of Management & Marketing In Healthcare, 3(2), 150-162. doi:10.1179/175330310X12665775636508

Small-Business Priorities. (2009). Financial Executive, 25(3), 10.