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Health Care Changes for Small Business

Here's how recently passed health care reforms will affect small businesses now and during the coming years.

By Althea Chang, MainStreet



) --

Health care reform

flooded news outlets early this year, but

small businesses

were left to sift through mountains of information to find out how new policies would affect them.

Here's a rundown on how new health care policies will change

small-business benefits

now and during the coming years.

Immediate benefits

: As of the beginning of this year, small businesses offering health insurance and covering 50% of premiums can get tax credits to cover up to 35% of insurance costs. The credit only applies to companies with 25 employees or fewer that are paying an average employee a salary of $50,000, according to the

White House


The exact percentage a company will get back in tax credits depends on a particular firm's

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size and average wage


Wall Street Journal

reports. About 4 million businesses are expected to be eligible for the credits, according to White House estimates.

The downside? Small businesses with more than 25 employees or lower average salaries are simply out of luck.

Less pressure

: Larger companies may be required to provide health insurance to their employees or pay fees, but the majority of small businesses won't be as pressured by the government. They'll be

exempt from the fees

that would otherwise be given to companies that don't offer health insurance, the White House has said.

Possibly as an added bonus, tax credits that small businesses receive for offering health insurance to employees may encourage many more companies to offer it, making small businesses more appealing workplaces than they've been. Among businesses with three to nine workers,

fewer than half

offered health insurance last year, the

Wall Street Journal


Offering health insurance could help small businesses compete with large companies for talent,

switch to smaller firms

, according to

AOL Small Business


The downside

: Sole proprietors and small businesses with more than 25 employees don't get the tax credit for health insurance, but they will

benefit from health care reforms

eventually, according to the

Honolulu Star Bulletin


Many of the benefits from health care reform won't take effect until 2014, but people who work for themselves will start getting access to health insurance exchanges and may receive government subsidies toward buying their own health insurance. Also, small businesses with 25-49 employees will not be subject to fees for not providing insurance.

However, businesses with more than 50 employees will be required to pay a $750 fee per worker if they don't

offer health insurance

, according to

USA Today


In time

: In 2014, small businesses tax credits for providing health insurance will increase to as much as 50%, the White House says.

At the same time, so-called health care "exchanges" will be available to help uninsured individuals and small businesses get health insurance, and certain small businesses that get coverage through them can get a tax credit for the portion of the


they cover for employees, the Wall Street Journal reports.

-- Reported by Althea Chang of MainStreet in New York


This article was written by a staff member of