“The Patient Protection and Affordable Care Act” (“PPACA”) signed into law by President Obama on March 23, 2010 is still being hotly contested, but some changes are already in effect. Take note of the following:
Tax Credits for Qualifying Small Businesses and Nonprofits
One of the bright sides of health care reform for small businesses are the tax credits for which they may qualify and which will make it more affordable for them to provide health insurance for their employees. To qualify for the PPACA tax credit an employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). Additionally, the employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate. And, the employer must pay annual average wages under $50,000. Currently, the credit is up to 35% of a small business’ premium costs, and for nonprofits meeting the same criteria the tax credit would be up to 25%. In 2014, the tax credit increases to 50% for qualifying small businesses and 35% for nonprofits. However, the credit phases out gradually for businesses with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Group plans can no longer be cancelled by insurers due to the illness of a covered member of their group. As for the overall key components of the “Patient Protection and Affordable Care Act” affecting all individuals with health insurance, following are some key points already in effect: