While most organizations are not waiting for a repeal of health care reform, many are looking for further guidance on specific provisions of the law before making decisions on their benefits plans, according to a new poll by the Society for Human Resource Management.
In the SHRM poll, more human-resource professionals ”“ 62 percent ”“ reported being comfortable with their knowledge of the Patient Protection and Affordable Care Act, up from 48 percent in June.
Still, helping employees understand new health-plan features was the greatest challenge during the recent open enrollment period for insurance, according to a separate survey by New York City-based Towers Watson & Co. Implementing the first phase of health care reform-related administrative changes was relatively easy for companies polled.
Calculating the tax credit
For many businesses, the Affordable Care Act kicks in with this year”™s tax returns covering 2010 income, for which some small businesses can claim a new tax credit for offering health insurance to their employees. The Internal Revenue Service has made available a draft of Form 8941, which businesses can use to calculate the health care tax credit, in advance of a final version of the form later this year.
The tax credits cover 35 percent of premiums paid by small businesses ”“ as an example cited by the U.S. Department of Health and Human Services (HHS), a company with 10 workers who earn an average of $20,000 a year could currently receive credits of $35,000.
Even as business owners are adding up their tax credits, lawmakers continue to add up votes in Congress for or against the Affordable Care Act ”“ and legal decisions from the bench.
Going to the courts
So far this year, the U.S. Senate and U.S. House of Representatives have split on continuing federal health reform under its current form, with the Senate voting in early February on party lines to continue reform as presently constructed.
For now, that has all eyes on the U.S. Supreme Court, which could take up one or more cases wending their way through the federal court system ”“ at present four decisions have been split as issued by U.S. district judges. Virginia”™s attorney general indicated in early February he would seek an expedited Supreme Court hearing on a district judge”™s ruling that the individual insurance mandates are unconstitutional as imposed as part of the act.
With more than 20 states ”“ a number that does not include New York ”“ the National Federation of Independent Business is a plaintiff in another lawsuit fighting the constitutionality of the Affordable Care Act, arguing the commerce clause of the Constitution prevents the government from forcing citizens to buy a product or service against their will.
“The mandates, penalties and regulatory burdens imposed by this law are costly and confusing to Connecticut small businesses,” said Andrew Markowski, NFIB”™s state director in Connecticut, in prepared remarks attributed in identical form to NFIB”™s state director in New York. “We are very pleased by the judge”™s ruling today and we are confident that higher courts will agree that the law is an unprecedented and unconstitutional power-grab by the federal government.”
Help or hinder?
Disagreement reigns supreme with regard to whether the act will help or hinder small businesses, factoring immediate benefits like the small-business tax credit against taxes and fees in the longer term ”“ and the overall uncertainty whether premiums will come down. The Congressional Budget Office estimates the Affordable Care Act will reduce the cost of small-business health insurance premiums by between 1 percent and 4 percent.
HHS last month published what it said was an accounting of the cost of repealing the act in New York ”“ including costs on small businesses.
At least one claim appears suspect in light of parallel New York law. HHS says 78,000 young adults would lose their insurance coverage through their parents”™ health plans thanks to an Affordable Care Act provision that allows them to stay on those plans through the age of 26 ”“ apparently ignoring a 2009 state law that allows those dependents to stay on their parent”™s plans until they turn 30.
What”™s more, in the SHRM poll more than half of businesses polled cited the cost of adding benefits for adult children as a barrier to implementing early health reform.
The IRS estimates that it will take 12-17 hours to calculate the Small Business Health Care Tax Credit, as per Form 8941. The http://www.smallbusinesstaxcreditcalculator.com calculates the credit and fills lines 1-14 on Form 8941 in minutes.