The Health Care and Education Reconciliation Act of 2010 was signed by President Obama this year. The Reconciliation Act amends various provisions of the Patient Protection and Affordable Care Act, the health care reform act that was signed by the president in March 2010. The Reconciliation Act also proposes some new provisions that were not contained in the Patient Protection Act.
Almost every individual and business in the United States will impact this legislation. For small business owners much of the impact is not going to be immediate. Until 2014 they will be purchasing insurance in the same markets as they are today. Many of the provisions of these acts will not be effective until 2014 as states consider how to implement and set up the Small Business Health Option Programs (SHOP exchanges) contemplated by the law. Those exchanges will be designed for small business to pool together to purchase insurance.
Until those SHOP exchanges are set up in 2014, small businesses with 10 or fewer employees and average wages of less than $25,000 would receive a credit of 35% of their contributions to insurance premiums. If you meet those requirements and contribute $20,000 toward employee health premiums in 2010, you would receive a tax credit of $7,000.
Companies with 11 to 25 workers and an average wage of $50,000 would receive a reduced credit. Beginnng in 2014 businesses with more than 50 employees will be required to offer health care coverage or pay a penalty.
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