Now that the Health Care Reform Bill is law, there are some things about it that self- and small publishers can take advantage of.
The first step: If you haven’t yet, you should incorporate (S-Corp or LLC). [See my post about the whys and hows of this process here.] This moves your business from a sole proprietorship to a corporate structure, making the business separate from you personally. It also allows you to show the IRS and any other governing body that you are a business, and not just a hobbyist. It’s a good move from a business standpoint, and a good move to position yourself to take advantage of the new health insurance.
The second step: The new HCR bill has the following provisions that you can take advantage of:
For businesses with 10 or fewer employees whose average annual wages are less than $25,000 and whose employees pay at least 50% of their health insurance premium (and that would be most self- and small publishers), the business will receive a tax credit of 35% of their employee’s premiums. [Companies with 25 or fewer employees whose average annual wages are up to $50,000 each will also get a tax credit, but not as much.]
Insurance pools are being created, and by 2014 each state will have a Small (Business) Health Options Programs (SHOP) in which to buy effective coverage. Given that here in Nevada, the governor has already refused to set up such a structure, this will probably become a federal program. These SHOPs will allow small businesses to band together and buy insurance at a lower rate than they would otherwise be eligible for. [For a fuller explanation of the ins and outs of SHOP, see this site.]
As of the bill’s signing, pre-existing conditions are covered for all children under 18. Pre-existing illnesses will be covered for adults by 2014. (There are some conditions that may create punishments for tobacco use and geographic location. This last bears careful watching.)
Businesses that provide health insurance benefits for early retirees in the age bracket between 55-64, who are not yet eligible for Medicare, will be reimbursed for their claims from $15,000 to $90,000 at 80%. This program will continue until 2014.
Employees with dependent children up to age 26 will now have coverage for that child. That means, if you have a kid in college, or one who is currently unemployed, that child is covered.
UPDATE: There are now some limitations to this. See the post here.
All new insurance plans require the employer’s plan to cover the first dollar of preventative health services.
This is a big win for small business—which means self-publishers and small presses
”There is still some tweaking going on. Look for more fine-tuning of the process from Congress in the next 2 years.
The downside to the bill:
There is a really alarming section of the bill that says that by 2012, small business people must write up an IRS form 1099 for all purchases over $600. Stay tuned. Hopefully, someone will fix this – but you should write your Congressperson and Senator to help get this repealed. [Updated July 2. Thanks to Judy Gruen for pointing this out.]
The funding for the bill comes from additional payroll taxes on employees earning $200,000 or more, or families earning more than $250,000. However, the law specifically exempts from this tax increase income earned by those running small, closely- held businesses.
After 2014, employers with 50 or more employees (and there is a bill that expands this to include part-time workers) who have not provided health insurance will be assessed a fine of $750 per employee–although there is a bill in Congress raising this to $2000 per employee.
There will also be an excise tax on “Cadillac plan” insurance premiums that cost more than $10,000 per individual, or $27,500 for the family.
Summary: Overall, this is a big win for small business—which means self-publishers and small presses. I know too many in publishing who are “going naked” [have no insurance] and will greatly benefit – both personally and financially – from this coverage.
