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How the New Health Care Law (PPACA) Will Affect Your Business

Costs and Taxes in Obama's Health Care Plan

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President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law in March 2010. Several of the law's provisions affect your business, including providing tax credits if you provide employees with single coverage health insurance. Details of the provisions which affect businesses are provided.

1. Health Care Law Timeline for Businesses

President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law in March 2010. The law was modified by a reconciliation shortly thereafter.

Several of the law's provisions affect your business, including providing tax credits if you provide employees with single coverage health insurance and allowing self-employed business owners to take a tax credit for health coverage for themselves and their spouses.

This article details the various provisions of the Health Care Law that affect businesses and when they go into effect.

2. How the Health Care Law (Obamacare) Will Affect Your Business

The Patient Protection and Affordable Care Act (PPACA) (or, "Obamacare") will definitely affect your business if you are self-employed or if you have emplyees.
Effective now, maller businesses that employ fewer than 25 employees may be eligible for a tax credit for providing health care for those employees.
Effective in 2014, larger businesses that employer more than 50 employees will need to provide affordable coverage for employees or pay a penalty.
And, also effective now, self-employed business owners may be eligible for a tax credit from their income tax for the cost of health insurance for themselves and their families.

3. About the Health Care Tax Credit for Small Businesses

Included in the Patient Protection and Affordable Care Act is a tax credit for small businesses that offer health insurance coverage to their employees. The credit is available to small employers that pay at least half the cost of single coverage for their employees. The credit is specifically targeted to help small businesses that primarily employ low- and moderate-income workers. For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers. The maximum credit goes to smaller employers — those with 10 or fewer full-time equivalent (FTE) employees — paying annual average wages of $25,000 or less. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals. Employers with more than 25 FTE employees or that pay average wages of $50,000 per year or more are not eligible for this tax credit.

4. How to See If Your Small Business Qualifies for the Health Care Tax Credit

This three-step worksheet allows you to determine if your small business qualifies for the new health plan tax credit.

5. How to Calculate FTEs for the Health Care Tax Credit

Small businesses must have 25 or fewer FTE (full-time equivalent) employees to qualify for the health plan tax credit. This article explains how to calculate FTEs to determine your business's eligibility.

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