California Gears Up for Reform Provisions Taking Effect This Year California Healthline
It's been more than a month since President Obama signed health care reform legislation into law. The debate over health care overhaul hasn't stopped since the passage of reform, but the conversation has quickly shifted to implementation.
Many of the most-publicized health reform provisions -- such as the creation of health insurance exchanges and the requirement that most U.S. residents purchase health insurance -- won't take effect for several years. However, there are a slew of provisions slated to go into effect this year that likely will have an immediate impact in California. Here's a rundown.
Effective Immediately -- Small Business Tax Credits : Under the health reform law, small businesses are eligible for tax credits to help offset the cost of providing health insurance to employees. To qualify for the tax credit, a business must have fewer than 25 employees, provide average annual wages of under $50,000 and cover at least 50% of its employees' health insurance premiums. From 2010 through 2013, the tax credit will cover up to 35% of the employer's share of premiums. In 2014, the tax credit will increase to 50%. Not-for-profit, tax-exempt organizations also are eligible for the tax credits -- 25% in 2010 through 2013 and 35% in 2014. According to a March issue brief from UC-Berkeley's Center for Labor Research and Education, California residents who work at small businesses or are self-employed represent a disproportionate 71% of the state's total uninsured population. The center estimates that small California businesses could receive more than $4.4 billion in tax credits over 10 years through the reform provision. California small businesses with fewer than 50 full-time employees are exempt from the reform law's requirement to provide health insurance by 2014, but some analysts say the tax credits and eventually the law's health insurance exchanges could encourage many small businesses to provide insurance.
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