The New Health Plan: What Does it Mean for Small Businesses?

Carol and Glenn* own a small business in Ridgefield with six employees. They’ve been watching the news carefully, and like most of America, are curious about the implications of the new health care bill. “In principle, I think it’s admirable to make sure Americans are receiving proper medical care,” Carol said. “But I’m concerned about how some of the aspects of bill are going to affect my business.”
Carol’s not alone. After all, we are a nation of more than 29.6 million small businesses with about 58 million employees (source: USA Today), and the new bill will change the way small-business owners purchase and provide health insurance for themselves and their employees.
In his Connecticut Employment Law Blog, Dan Schwartz reviewed some of the basic facts of the bill. Schwartz explains that employers are not, technically, required to provide health insurance to their workers under the bill. But, if employers with 50 or more employees do not provide health insurance, they will be required to pay a fine of $2000 per worker each year if any worker receives federal subsidies to purchase health insurance.
Many of the provisions will not kick in until 2014. Within the next two years, a plan to provide a vehicle for small businesses to offer tax-free benefits will be created. According to CNN, this would ease the small employer's administrative burden of sponsoring a “cafeteria plan.”
As for employees, their good news is that they won't have to stay in a job they hate for fear of losing health insurance for themselves or their children.
It’s still very early, so we will keep posting as part of our employment law commentaries as more relevant information develops. In the meantime, CNN and The Washington Post offer some helpful information.
*names have been changed to protect privacy

