In an historic move, the U.S. Supreme Court upheld President Obama's health care law on Thursday. Now that the constitutionality of the law has been decided, small business owners are faced with decisions on how they will comply, and what those decisions will cost, according to multiple media accounts outlets.
Under the Patient Protection and Affordable Care Act, individuals are required to carry health insurance or pay a penalty. All told, the law should extend health coverage to about 30 million more people, according to the Wall Street Journal. While some of the law's provisions are already in place, Jan. 1, 2014, is when the bulk of the provisions requiring Americans to have health care take effect.
Looking ahead, businesses with 50 or more full-time employees (working a minimum of 30 hours a week) must provide health care benefits to those employees by 2014 or pay a penalty, according to the Small Business Legislative Council. The penalty is $2,000 times the number of employees minus 30 (see a detailed flow chart here). The law allows businesses to go over the 50 employee limit for 120 days when using seasonal employees. Businesses with more than 200 employees must automatically enroll all employees in their plans, and all plans must meet minimum essential coverage requirements.
At companies with fewer than 50 employees, the responsibility to find coverage falls to the employees, according to CNN. Choosing not to buy insurance in 2014 will cost a person $95 or 1 percent of their income, whichever is higher, and in 2015, it will be $325 or 2 percent of income. Penalties rise each year after that.
Today, states are working to create health care exchanges where individuals-and businesses with up to 100 employees-can shop for coverage, according to the Small Business Legislative Council. The exchanges will also be a spot where solo entrepreneurs can shop for coverage.
