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Washington Post: Obamacare Confuses 'Small Business' Definition

By    |   Sunday, 25 Aug 2013 11:37 AM

Obamacare has multiple definitions of what a small business is, which is sowing confusion for companies ahead of the new health law’s implementation, The Washington Post reported.

The result is that it may be difficult to assess how Main Street will truly be affected by the legislation, known as the Affordable Care Act (ACA).

Much of the confusion is tied up with different thresholds on the number of workers for different aspects of the ACA mandates. The revenue total a small business generates is also a factor.

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

Keeping track of which ACA provisions apply to which small firms is a huge challenge, according to Hugh Joyce, owner of a Virginia air conditioning firm that has 150 workers.

The federal architects of Obamacare “were trying to be soft on small businesses and hard on large businesses, but this complicated scheme is just going to make it hard on everybody,” he told the Post. “It just turned into such a massive, convoluted piece of legislation.”

In September, small business owners will gain access to new online health exchanges where they can select insurance for workers. But Congress restricted access to the exchanges to companies with fewer than 100 workers (although states are can set the limit lower for the first two years).

The 100-worker threshold is significantly lower than the ones set by the U.S. Small Business Administration, which often uses a 500-employee maximum to define “small business.”

Moreover, starting in 2015, large employers must provide sufficient health insurance to their employees or pay tax penalties, while small companies are exempted. The definition of “small business” in that instance is those with 50 employees or less.

Also, the ACA provides tax breaks for small companies, but only those with ten or fewer workers need apply for a full tax credit, or with 25 workers or fewer for a partial tax credit.

Finally, some of the Obamacare limits are set at revenue levels rather than headcount. A new tax on investment income over $200,000 will affect firms that pay their company taxes as part of the owners’ personal income taxes, the Post reported. In addition, companies with more than $500,000 in annual revenue will be required to meet Obamacare notification requirements regardless of their employee count.

National Public Radio (NPR) reported Friday that “despite promises by President Obama that people can keep the insurance they have once Obamacare is in full effect, millions will have to upgrade their policies to meet the benefit standards laid out by the Affordable Care Act.”

The ACA is scheduled to be in full effect in January, 2014.

Reuters reported that U.S. House of Representatives Speaker John Boehner, R-Ohio, warned GOP House members in a conference call on Thursday against threatening a government shutdown to stop the implementation of Obamacare.

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

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Obamacare has multiple definitions of what a small business is, which is sowing confusion for companies ahead of the new health law's implementation, The Washington Post reported.
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Sunday, 25 Aug 2013 11:37 AM
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