Health Care Reform: Changes for Seniors and Small Business Owners
Earlier this week I wrote about the new health care reform rules, officially known as The Patient Protection and Affordable Care Act. Click here to read my previous post.
Here is additional information on what you need to know about some of the changes that go into effect this year -- specifically those that will impact seniors and small business owners.
Effective this year:
Plugging the Medicare "Donut Hole." Older folks on the Medicare Part D prescription drug plan will start getting a $250 rebate check, which is intended to offset some of their out-of-pocket costs for the "coverage gap" where prescription drug costs aren't covered. This currently happens when the amount spent is between $2,700 and $6,154.
Small businesses will get tax credits. Tax credits for small business will be phased in starting this year. Qualified small business owners who employ 25 employees or less and purchase health insurance for their employees may receive a tax credit of up to 35 percent of their contributions to purchase health insurance. By 2014, this tax credit goes up to 50 percent of these costs. If the small business employs 10 or fewer employees who have annual wages of less than $25,000, the credit is 100 percent of these costs.
The federal and state government and health insurance companies have a lot of work to do on systems, policies, and procedures to implement the new law; much needs to be worked out before these changes are in place.
Watch your mail carefully because most major health insurance companies will have a communications plan that includes sending letters to keep you informed about the upcoming changes, including what you will need to think about.
One of the more bizarre taxes that will affect individuals this year is the Indoor Tanning Services Tax. The new law imposes a ten percent tax on money paid for indoor tanning services beginning July 1st.
It looks like keeping that tropical glow is about to become more expensive.
Ray Martin
View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.
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