Friday, July 20, 2012

Information Every Small Business Should know about Affordable Care Act/ Burdensome Regulations

Thank you to all that were on the webinar Wednesday. Also a big thanks to Kim Parker at the California Employers Association and Sherly Carlson who Co Hosted. Please see what we have put together with the highlights of the webinar.


Small Business tax credits

Until 2014 there is a 35% tax credit for businesses up to 25 full time employees with employees’ average wages of less than $50000. Owner and their families are not included in the calculation. The credit is on a sliding scale. If you have 10 employees or fewer and the average salary is $25000 or less you will receive the full credit. Starting in 2014, the credit increases to 50% for two years and can be carried forward for up to twenty years.

Please see link for more information on tax credit from the IRS:,,id=223666,00.html


If you issue more than 250 W-2s, you will have to report the cost of health insurance benefits for the 2012 tax year. Businesses with less than 250 employees will retain exemption until the IRS comes up with additional guidelines. The amounts spent for employee health benefits by an employer are not taxable income to an employee.


Small Businesses with 50 employees or less will be able to purchase health insurance through the new Small Business Health Options Program (SHOP) Exchange in 2014, the size increases to 100 employees in 2016. Small businesses under 50 can also have their workers purchase subsidized coverage through the individual exchange without paying a penalty (though they would lose the tax benefit of paying for insurance.) The Exchange will negotiate rates with insurance companies. The Exchange will also provide a portal which is tasked to provide easy to understand information about cost, quality and coverage options. A small business can continue to use its broker. Navigators will be provided by the Exchange to explain the program and assist individuals and small employers with enrollment. A small business or self-employed individual may purchase directly from the Exchange through on-line electronic enrollment in addition to traditional paper-based enrollment avenues.


In 2014 an individual will be required to purchase or enroll in coverage or pay a tax penalty of $95 or 1% of taxable income, whichever is higher; this will increase on a phased-in basis to $695 or 2.5% of taxable income in 2016. There is no employer mandate unless you have 50 or more full time equivalent employees. Those with 50 or more employees can either purchase insurance or pay a tax/penalty of $2000 per full time employee. In calculating this tax, you count your total full time equivalent employees then deduct 30 employees. For purposes of determining if you meet the 50 full time equivalent employee threshold, part time employees , those under 30 hours, will be added together to determine full time equivalents. If you offer coverage, however, you are not required to cover part time employees.

September 23, 2012

In your Open enrollment period on or after this date, your plan’s participants must receive a more standardized and comprehensible Summary of Benefits and Coverage during the enrollment period.

Have you seen a federal regulations that make no sense. Here’s your opportunity to identify burdensome regulations and do something about it.

White House Asks Businesses to Identify Burdensome Regulations

On July 18, 2012, The White House opened up its regulatory reform effort to the public, launching a website for tips on how the government can streamline or eliminate regulations. In 2011 the President directed all executive agencies to undertake an unprecedented government-wide review of regulations on the books, in order to figure out what is working and what is not, and where appropriate, to streamline or eliminate ineffective, overly burdensome, and outdated rules. Over two dozen agencies responded with regulatory reform plans, listing more than 800 initiatives. The Administration is now asking for businesses to send them comments identifying burdensome regulations.

• Submit comments to the White House here

• Advocacy contact: Charles Maresca, 202.205.6978

For more information on Regulatory Alerts see

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


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