The new healthcare reform law, technically known as The Patient Protection and Affordable Care Act or more commonly as, "Obamacare," contains numerous tax and other provisions applicable to business and business owners pending review by Congress and the courts. In an article written by Norman S. Newmark, JD, LLM, of the firm and published in the April 16, 2011 issue of The Oklahoma Bar Journal, Mr. Newmark summarizes the provisions of the new law along with the practical implications for businesses, including recommendations for compliance and the effective dates for various provisions of the new law.
Salient provisions of the healthcare reform law as outlined in the article include:
1) New requirements for employers to provide "vouchers" payable for the costs of insurance of certain low income employees (i.e., those who choose not to participate in employer sponsored plans) as offered in new state sponsored health exchanges known as Small Business Health Options Programs" or "SHOP exchanges" for short;
2) Reduced requirements for non-discrimination rules for certain cafeteria plans sponsored by small employers, i.e. those with fewer than 100 employees;
3) New requirements for reporting of healthcare benefits provided to employees on IRS W-2 forms (annual wage and withholding statements) and other required reporting of employee health benefits, plus penalties for the failure to comply or underreporting of benefits;
4) New penalties for employers who provide too little coverage under health care insurance (i.e. those not meeting "minimum essential coverage" consisting of a list of benefits as defined by law);
5) New penalties for employers who provide too much health insurance coverage (read: expensive) over certain dollars caps for individuals and families, with adjustments for high risk occupations and the like, commonly known as the "Cadillac Plan" excise tax of 40%;
6) Additional Medicare taxes on business owner salaries and unearned income above certain minimums; and
7) A reduction in the amounts which can be deferred into cafeteria plans (flexible spending arrangements), health savings accounts, Archer medical savings accounts, etc. plus a new limitation on the use of deferred benefits for prescription drugs.
Recommendations for compliance and reducing tax costs include increasing the use of accounting, insurance and payroll providers plus updating computer software to keep track of required reporting, and using "S" corporation status and Roth IRAs to reduce higher Medicare taxes.
For a full-text copy of the article, visit http://www.okbar.org/obj/archived.htm and click on the April 16, 2011 issue of The Oklahoma Bar Journal.
