Now is a good time to develop a close rapport with your accountant and insurance agent. The Patient Protection and Affordability Care Act is going to make it a necessity, not a luxury.
Maggie Moree, director of federal affairs for the Business Council of New York State, has been visiting chambers statewide to let members know what”™s in store for business in 2011 and beyond.
After meeting with Ulster County Chamber of Commerce members on Sept. 16, she traveled south for a luncheon with the Rockland Business Association.
Moree asked listeners in jest, “Not to shoot the messenger … but I am not bringing good tidings about the new federal health care legislation.”
Since many employers are already looking at their 2011 budgets and benefit plans, “paying close attention to the new legislation is something everyone needs to get in tune with.”
With some provisions already in play ”“ covering adult dependent children for one ”“ much more is ahead for business owners.
Insurance plans for dependents under age 26 were to have opened their enrollment Sept. 23. Employers may have to enroll and cover additional dependents under current family contribution rates or consider new contribution structures.
There will be tax credits for firms with 25 employees or less, but the more the company pays those employees, the less benefit it will receive. Employers must also provide 50 percent or more of the cost of insurance for employees to be eligible for the credits.
Although companies that have insurance plans in place can choose to grandfather them, said Moree, most are electing not to take advantage “because the rules are too restrictive.”
By 2011, employees will be required to report the value of employees”™ health benefits on W2 forms. Limits on health savings accounts and flexible spending accounts will begin and will no longer permit the purchase of over the counter medications as part of the plans.
If a company has more than 200 full-time employees, employers that offer employees one or more health benefit plans are mandated to auto-enroll all full-time employees, even if those employees are covered under a spouse”™s plan.
By 2012, business will have to complete 1099 forms for every business-to-business transaction of $600 or more, a mechanism by which the federal government expects to raise $17 billion in revenue, according to Moree.
By 2013, there will be new limits on the deductibility of medical expenses on individual income tax returns ”“ from the current 7.5 percent to an adjusted gross income of 10 percent ”“ and new Medicare payroll taxes on wages and self-employment income in excess of $200,000 per single person, $250,000 per couple, will begin. “This does not just include your regular income; it also applies to net investment and passive income,” she said.
By 2014, she said, “the federal legislation will include the new health care exchanges. If you have a business with 25 or less employees, you can opt out of the exchange.” For those participating in it, they will have to determine if employees are eligible for a health care subsidy ”“ a determination made on total family income, investments or other passive assets the person may have.
“For small companies who have a single employee taking care of human resources, it”™s going to be very difficult for them.” That”™s when Moree suggested to her listeners they “develop a close rapport with their accountant and insurance broker. This is not a luxury, it will be a necessity, particularly when you realize how much is going to be expected, whether you are a business of 250 or 20 people.”
Moree also questioned the reasoning behind Gov. David Paterson”™s convening of a health care task force, since “Paterson only has a few months left in office.” But she did encourage business owners to get involved in the national conversation and educate themselves.
“If you don”™t like the MTA tax, you aren”™t going to be any happier with what”™s coming down the road.”
