Outrage #2: Bad for Small Business
Health insurance is a huge burden on small business and a reason not to be an entrepreneur.
Solution: Small Business Coverage. Small employers with 100 or less on staff may be able to set up “simple cafeteria plans” if they contribute at least 2% of each employee’s compensation or contribute 200% of the employee’s contribution or p to 6% of the employee’s pay. Soonish.
Solution: Tax Credits. There are tax credits and subsidies to incentivize good coverage. “Small employers” can get a tax credit today if they contribute 50% of the premiums for all employees. That tax credit can be up to 35% of the company’s premium costs until 2013 and up to 50% of the cost in 2014 and 2015. The tax credit would reduce the company’s tax liability for income. Tax exempt companies can get a credit of 25% per year through 2013 and 35% in 2014 and 2015. Small employers cannot include companies with more than 10 employees making an average of $25,000 per year. The tax credit would reduce the company’s income and Medicare tax the entity must withhold from employee wages. However, the employee can take either the tax credit or the health insurance premium deduction, but not both. Finally, companies who offer coverage for retirees between 55 years old and 64, can get reimbursement for some claims. This is extremely limited in regulation and funding.