LITTLE ROCK Ark. (KTHV) -- The Supreme Court voted to uphold a critical part of the President's health care reform, now business owners may have to make a few changes when it comes to providing health care.
The bottom line is if you employ more than 50 full-time workers then you must provide health insurance or pay a fine. If you have less than 50 full time employees then you are exempt from the law.
"The biggest thing it does at this point is take away the uncertainty, business owners struggle when they don't know the rules."
Bob Hamilton is a business owner now looking into what changes he will have to make when it comes to providing insurance for his workers. Starting in 2014, a business owner with more than 50 employees must provide insurance or be penalized. Hamilton calls it the pay or play method.
"Play means put in a group health insurance, the employers will pay a certain percentage of the premium if they don't choose to do that there will be penalties."
Those penalties are a non-deductible tax for each employee. But here's a possible wrinkle in the plan, the fine for not providing insurance is in some cases less than the cost of actually providing it, so we may see more and more businesses choosing the fine over insurance.
Here's how the penalty works. If you don't provide insurance then you multiply one twelfth by 2 thousand then multiply that number by the number of full time employees minus 30. There are also other ways you can be penalized, for instance, even if you do provide insurance and it costs too much money for your employees, you will have to pay a fine.
A business with fewer than 50 people won't have to provide insurance. Hamilton is exempt under this law but says it's important he provide health coverage so he can attract good employees. "We know that we may have to look at different health insurance carriers to see where we can get premium coverage for our dollar, we are not exempt from all this, we are just like everyone else we want the most value from what we can get."
For insurance to be deemed too expensive for the employee it must be more than 9.5 percent of their household income.