How health-care reform helps small business
Federal health-care reform law will take a few years to fully implement. But if you work for yourself or run a small business, you may already be feeling the new law's impact. Here's a look at the most important benefits of the 2,400-page bill:
If you're uninsured
For self-employed and unemployed people without health insurance, a new federally funded program offers a long-awaited means of coverage.
In July, the federal government set up a new insurance plan for uninsured people with medical conditions, called GettingUSCovered (www.getting-uscovered.org). Administered by Rocky Mountain Health Plans and CoverColorado, the program solves a frustrating problem for people who are or have been sick: It's almost impossible for them to buy health insurance.
While GettingUSCovered is not a low-income program, it makes health insurance available to people who have been denied coverage. Thanks to $90 million in federal subsidies, members pay the same rates as that of a healthy person of the same age and smoking status. The program is ideal for working people - such as self-employed consultants, marketers or Realtors - who live with manageable, chronic medical conditions and no longer want to risk their financial security by going without health insurance.
If you're a female business owner
For the past 20 years, women consistently have been launching new enterprises at twice the rate of men.
But when it comes to buying health insurance, female "solopreneurs" have been penalized. For instance, in Colorado, self-employed women starting a family couldn't buy comprehensive health insurance - maternity care was not offered. And some health plans rescinded coverage to women who signed up and later got pregnant or sick.
As of September, it was illegal for insurance companies to drop women if they got sick or decided to have a baby, except in cases of fraud. Starting next year, Colorado health plans in the individual market will be required to offer maternity coverage.
If you operate a small company
The smallest companies struggle the most to provide health insurance for their employees because their rates are much higher than those of large employers.
To ease the burden, the new law includes tax credits, effective now, to help an estimated 68,000 eligible Colorado small businesses and nonprofits afford and maintain health insurance.
Businesses that pay more than half of the cost of their employees' health benefits and have fewer than 24 employees, and pay average annual wages of less than $50,000 are eligible. The credit most helps firms with 10 or fewer employees and those with average wages below $25,000.
These businesses can claim a tax credit of up to 35 percent of the cost of premiums from the 2010 tax year through the 2013 tax year. The credit will go up to 50 percent in 2014 and can be used for two consecutive years after that.
If you're ready for competition and simplicity
GettingUsCovered and small-business tax credits offer some immediate relief to the business community and self-employed. A more widespread benefit of health care reform will come in 2014: health insurance exchanges.
Exchanges will allow small businesses and individuals to pool their purchasing power - in effect, to act as a large group - to buy health insurance. Pooled purchasing promises to lower the cost.
It also creates an online marketplace - think Travelocity or Expedia - that adds transparency, comparability and competition to the process of buying insurance.
In addition, in 2024, employers can decide whether to continue offering group coverage or let employees buy their own health insurance, perhaps with a pay raise to help.
As health reform begins to take shape, self-employed workers can seek help through GettingUSCovered, and small-business owners will see tangible benefits such as tax credits that go a long way toward reducing the financial burden of insuring themselves, their families and their employees.