Debate about the new Health Care Bill once dominated the airwaves and Internet. However, discussion has gone dormant. Better known as “Obamacare,” the legislation has been tweaked since its passage.
Health Care Bill Cost Increases
Those changes had no impact on most cost increases. So, a question remains unanswered. How much is the Health Care Bill really going to cost you? Small business owners face a variety of mandates.
Employers will be required to report the value of an employee’s medical insurance on his or her 2011 W-2 forms. The U.S. Internal Service delayed this edict. It’s letting employers decide whether to comply this year.
If not for Congressional action, small businesses would have mandated to file Form 1099s.
People remaining uninsured after 2013 could face penalties. This mandate remains law, despite numerous states’ constitutional challenges. With that said, the IRS has yet to figure who’d owe the penalties.
Businesses with more than 50 or more full-time equivalent employees, which have no health plan, face an excise tax beginning in 2014. In theory, companies with part-time employees could be required to provide coverage.
4 Percent Medicare Surtax
High-income earners could face a nearly 4 percent Medicare surtax on passive income, starting in 2013. They are married couples, filing jointly, earning $250,000 or individuals earning $200,000.
Unearned income like interest, royalties, dividends (or K-1 income from an S-Corporation), capital gains, annuities and rental income is subject to the tax. IRS rules exclude business income.
No change is on the horizon, before these requirements are enacted. If changes are made, they’d be the U.S. Supreme Court’s responsibility. With that said, more guidance from the IRS is needed.
Former Office of Management and Budget official James Capretta, now a Heritage Foundation fellow, claims the 10-year cost of “Obamacare” could meet or exceed $2.5 trillion, according to Investors.com.
Investors.com also reports subsidies to individuals and businesses would soar. For instance, subsidies for a family of four earning $60,000, covered by an employer’s health plan, would fall by $4,500 in 2016.
That’s as opposed to a family buying insurance from a government exchange. Mandating people purchase health insurance would increase premiums by 10 percent or more.
Affects On Businesses
Rising health care costs have already affected businesses, according to finance.yahoo.com. It noted that the Wall Street Journal reported Caterpillar will take $100 million hit in the first year.
Medical device Medtronic warned new taxes could translate into significant layoffs. Verizon announced it would likely cut benefits in response to higher costs.