Immediate effects of health care reform on small business

On March 23, 2010, President Obama signed into law H.R. 3590, the Patient Protection and Affordable Care Act (PPACA).

This piece of legislation is 2,500 pages long, and all of its details are still being sorted out.  Allpointe will stay on top of the changes, and provide you with periodic updates.  If you have questions at any time, please contact us.

Many pieces of the legislation will not kick in until 2014; however, a number of changes will take place in 2010 and 2011, directly affecting small business health plans.  One immediate change that should be of interest to every small business owner: tax credits for the funds you currently spend on health insurance for your employees.

Yes, there are restrictions which may quickly eliminate many Bay Area employers (average employee wage must be under $50,000/year).  But it is definitely worth checking out.  The IRS has just provided details on the tax credit and eligibility guidelines.  If you think you may qualify, we can assist you with this by directing you to tax and legal professionals who are familiar with the credit.

Some other changes that will affect small employers in the next 6-12 months:

  • Dependent children must be covered up to age 26 (no requirement for full-time student status)
  • Waiting periods for new hires may not be longer than 90 days
  • Employers must enroll employees (with an opt-out provision) in the new federal Long Term Care benefit
  • Over the counter medications will no longer be a qualified expenses for HSA/FSA/MSA accounts, unless prescribed by a physician
  • The penalty for unqualified withdrawals from a Health Savings Account (HSA) will increase from 10% to 20%

For a full summary on the implementation timeline, Employee Benefit News has a two-part summary on their web site.  You can also download a good, detailed overview from the National Association of Health Underwriters.

Again, we will continue to keep you updated as additional guidelines come out, and will review these in detail with you as your small business health plan approaches its upcoming renewal.


SF Health Care Security Ordinance - Feb 2010 update

Find out everything you need at the San Francisco OLSE web site

Summary of updates from Joannie Chang on 2/12/2010:

Newly Revised Documents
The Annual Reporting Form (ARF) for 2009 has been uploaded to our website
as a fillable PDF; to download this document, please use the link provided
in the section titled "Forms & Documents."   Pre-printed ARFs will also be
mailed in March.   If you would like to check your mailing address, please
call Taxpayer Assistance at 415-554-4400.  Completed ARFs must be returned
by Friday, April 30, 2010.  (posted 2//12/10)

The Employee Voluntary Waiver Form has been reformatted to use a larger
font size and to fit on 8.5"x11" paper.   There is no need to replace any
waivers you have on file, but the new form should be used for all future
waivers/revocations.  Remember that waivers are valid for only one year
after the date of signature.  (posted 10/13/09)

The FAQs have been revised to clarify questions regarding FAQs #16, 23, 26,
32, 39, 40, & 47.  (revisions posted 12/18/09 & 2/5/10)

The ESR Calculator has been revised to include 2010 expenditure rates.
(posted 1/20/10)

The Employer Notice regarding the Health Care Security Ordinance has been
revised to include 2010 rates.  (revised 1/28/10, posted 2/5/10)

Upcoming Presentations on the HCSO

None scheduled at this time.

Joannie C. Chang, Contract Compliance Officer
Office of Labor Standards Enforcement
www.sfgov.org/olse/hcso

* * * If you haven't already, please visit our website, at
www.sfgov.org/olse/hcso, to review our Frequently Asked Questions document,
Final Regulations, the Ordinance,and other helpful information. * * *


Employees terminated in December will not be eligible for COBRA subsidy

The U.S. Department of Labor has provided clarification to the eligibility guidelines for the 65% COBRA under the current ARRA legislation.

Because employees of California small groups are typically covered through the end of the month in which they are terminated, they are not eligible for COBRA (or Cal-Cobra) until the first day of the following month.  For December terminations, that means January 1, 2010 -- one day after the eligibility period for the subsidy expires.

The DOL points out that this is based on current legislation.  There is a pending bill in the Senate as well as a House counterpart, both of which would extend the eligibility period, and the length of the subsidy for new and current beneficiaries of the subsidy.

12/22/2009 UPDATE: President Obama has signed a bill extending the COBRA subsidy.  The eligibility period for laid-off employees is extended two months, to February 28, 2010.  The benefit period is extended six months (to a maximum of 15 total).  The extended benefit period applies to the newly qualified and to those who have been receiving the subsidy under the original legislation.  Story here, from the WSJ.