Until now, I haven’t written much about healthcare reform issues – it’s just feels so daunting and politically-charged. I do support the eventual separation of work and health insurance, as I think that all unemployed, partially-employed, and self-employed individuals should get access to affordable healthcare. As the dust settles a bit, I took a look through the many attempts of media to break down the healthcare reform bill into manageable bites. Here are my notes:
- Employers with fewer than 25 employees (more if you have part-time employees) and less than $50,000 in average wages may be eligible for tax credits worth up for 35% of paid premiums. Note: The tax deduction is not available to sole proprietors, so you may want to consider an LLC or corporation form.
- All health insurance plans must allow people to maintain dependent coverage for children until they turn 26. This could help out the many young and self-employed. Also prohibits insurers from denying coverage to children because of preexisting health problems.
- If you are self-employed and have medical conditions that make it hard to find any health insurance at all, there will be a high risk pool set up to create “affordable” premiums. I wonder how affordable that will actually end up being.
- Insurers will no longer be able to put lifetime limits on coverage, or cancel policies that are already in service (except for fraud).
- Starting September 2010, all coverage must include basic preventive care. As many small businesses can now only afford catastrophic coverage, this may mean additional benefits.
- Companies with less than 100 employees will be eligible for grants to set up wellness programs. Employers can offer employees bonuses of up to 30% of the cost of insurance.
- Limits medical expense contributions to tax-sheltered flexible spending accounts (FSAs) to $2,500 a year, indexed for inflation. (I wonder how much it costs to administer one of these for a self-employed person.)
- All U.S. citizens and legal resident must have health insurance, or else pay a fine. People who are satisfied with their employer-provided coverage don’t have to do anything.
- Health plans no longer limit coverage based on preexisting conditions, or charge higher rates to those in poor health. Premiums can vary only by age, place of residence, family size and tobacco use. Wow!
- Individuals and small businesses with up to 100 employees will be able to shop for coverage from newly-created health insurance exchanges. Theoretically, this will allow individuals to get rates just as competitive as current large group plans.
- Small business owners who purchase coverage through the exchanges can receive a two-year tax cut for up to 50% of what they contribute toward their employee health insurance premiums.
- Individuals may receive income-based tax credits for insurance bought from the exchanges. Sliding scale credits will eventually phase out for households above four times the federal poverty level, until about $43,000 for an individual or about $88,000 for a family of four.