Health care changes are afoot—lots of them.   We’ve all heard about the health care reform passed by the Obama administration, dubbed “ObamaCare.”  Such reform includes sweeping changes like mandatory health coverage, extended dependent coverage, and limited spending on flexible spending accounts, to name just a few.  But what do all these changes really mean for your small business?

To start, by 2014, small-business owners and their employees must purchase a government-approved health insurance policy that offers unlimited lifetime and unlimited annual coverage.  New guidance issued by the administration mentions a potential waiver for businesses whose compliance would result in a significant increase to premiums or decrease in service availability.  Still, according to Obama administration estimates, these mandates could increase health premiums by seven percent.

The impending health care changes not only affect employees, but also employees’ children.  Under the new system, coverage must be provided to dependent and nondependent children up to age 26, regardless of children’s employment or marital status.  One estimate figures this mandate could cause a two-percent increase to premiums, if not more for small-business owners.

And what if the small-business owners switch health plans are no longer grandfathered?  Then the owners and their employees must bear the entire cost of preventative-services coverage.  This mandate is expected to increase premiums by roughly 1.5 percent; however, the administration is considering allowing employers to shop for less expensive health plans without penalty.

What’s more, by 2012, employers must begin reporting the cost of employer-sponsored health coverage on their employees’ W-2s.  These amounts aren’t taxable, but reporting them could put a tax on your payroll department!

These mandates are just a sample of changes expected for health care in the coming years.

To combat rising premiums, under the reformed health care system, small businesses that pay at least 50 percent of their employees’ health insurance premiums may qualify for a tax credit.  In 2010, the maximum credit is 35 percent of employers’ contributions to health insurance premiums.  By 2014, the maximum credit increases to 50 percent.  However, by 2016, businesses may no longer claim the tax credit and must shoulder the health care changes alone.

With so many health care changes on the way, who’s to say what these new mandates will cost, what additional insurance benefits must be provided, or even what kinds of insurance will be available to provide those benefits?  As a small-business owner, you’re already juggling so much paperwork.  Don’t get lost in the shuffle.  GHRO is here to guide you through the health care changes as they happen.  As the ultimate partner for HR outsourcing, we’ll help you make smart decisions for your small business.  We can even reduce your employee benefits costs by customizing the right package at the right price for your small business.  To discover a complete solution to your employee benefits needs, call GHRO at 888-308-0338.