Small businesses across the valley are finding more questions than answers surrounding the Affordable Care Act set to launch in 2014.
A seminar was held this week at Temecula City Hall by the staff at Temecula Insurance Services in an effort to educate business owners on the new health care reform laws.
President Barack Obama’s healthcare law requires all businesses employing 50 or more full-time workers, or the equivalent to provide coverage for their workers or pay a $2,000-per-employee penalty.
“There are so many variables,” said Brad Salute a broker at Temecula Insurance Services. “If you have a mix of part time and full time employees what equals part time can be confusing under the law.”
Starting on Jan. 1, 2013 a period called the “look back” will begin.
The “look back” period is what employers will be referring to when deciding who can get insurance at their company and who does not.
“Businesses who are close to the 50 employee mark will have to make tough decisions this year if they want to stay at the 50 employee mark,” said Salute.
There are four government agencies that will be overseeing and enforcing the healthcare bill: the Department of Treasury, IRS, Health and Human Services and the Department of Labor.
Salute said small businesses should work closely with their insurance broker to avoid penalties.
There will not be an opportunity to correct mistakes — fines of $2,000 per employee will be automatic.
“Employers need to also understand if they pay 50 percent of an employee’s health insurance, they have to make sure the premium placed on the employee doesn’t go above 9.5 percent of the adjusted gross income,” said Salute.
Under the new healthcare law, if the employee has to pay more than 9.5 percent of the AGI, the employer can be fined $3,000 per incident.
According to the U.S. Department of Health & Human Services, if you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35 percent (up to 25 percent for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.
Starting in 2014, the small business tax credit goes up to 50 percent (up to 35 percent for non-profits) for qualifying businesses. This makes the cost of providing insurance even lower.
“We are concerned about the penalties. The law is so confusing and we don’t want to be fined when we think we are doing something the right way,” said Linda Williams, who has owned a Richie’s Diner for 21 years.
Williams said she continues to educate herself on the healthcare laws and is not ready to discuss the details with her employees.
“They are still changing the laws as we speak,” said Williams. “It’s a big unknown.”
Salute said there will an educational seminar in January in collaboration with the city of Temecula and the Chamber of Commerce.
The date has not been confirmed yet but Salute said he would post the information on his website when the details are finalized.
‘The healthcare bill is more than 27,000 pages (long). No one understands it all but we have a good handle on it,” said Salute. “It is important for small businesses to work with their insurance broker.”
For more information, visit www.healthcare.gov. http://www.healthcare.gov/law/index.html.
To find out when the January educational seminar will be held click onto http://www.TemeculaInsuranceServices.com.
Michelle Mears-Gerst is a local writer and regular contributor to SWRNN.