Health care reform flooded news outlets early this year, but specific groups like small businesses were left struggling 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 in the next few years.
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 size and average wage, The 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.
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 in general 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 reported.
Plus, since more small companies will be offering health insurance, workers who have stayed at hated positions in big companies due to a better benefits package may be less afraid to switch to smaller firms, according to AOL Small Business.