How Health Care Reform Will Affect Freelancers and Small Business Owners
This week was a historic one with the passage of the Health Care Reform Bill. Like any legislative thing it is hard to read, complicated, and difficult to answer the question "What will it mean for me?" If you're a small business owner or freelancer, you already know that finding adequate and affordable health insurance is like navigating wild waters.
For some, it is the deciding factor of putting their dreams of being their own boss on the back burner. Even for very successful entrepreneurs, the real-life experiences with escalating health insurance prices result in compromise and premiums that look more like mortgage payments. Now that health care changes are upon us, will it make things better? worse? Or, more of the same?
I certainly can't tell you, because I haven't followed it that closely. It's not that it's not an important issue to me, it is. Yet the lengthy process and complicated language invites me to leave the interpretation to the experts and others who have followed every step of the health care bill journey extremely closely.
Our own Erin Kotecki Vest is one of those people, and she covered the breaking news this weekend. "The Health Care Bill: A Doctor's Point of View" from one of my favorite people, Lissa Rankin of Owning Pink tells it like it is from her view as a doctor, a mother and wife, a health care consumer and an employer. As someone who made the jump to self-employment she faces a challenge so many of us do.
My family has always been blessed to carry health insurance. Frankly, right now, we can’t afford it. Because I quit my fancy six figure job and am now self-employed and building a business from scratch, we’ve been on Cobra health insurance and are approaching the three year limit. We must get new insurance. But my husband and I both have preexisting conditions, and the private insurance we tried to get turned us down, even though we’ve had continuous coverage our entire lives. It’s criminal. So we pay $1000/month for insurance we can’t even use because we no longer live near the city where we are insured by an HMO.
Here's to hoping this new bill will help us, yet I feel similarly to Lissa in that it is really just a first step in what is hopefully the right direction.
Melinda Emerson has a good summary with plenty of links in her article "What Health Care Reform Means for Your Small Business". NYTimes.com attempts to wade through the confusion for everyone, business owner and otherwise, in "How the Health Care Bill Will Affect You".
What disturbs me about the picture (and they only have an uninsured self-employed single man with a pre-existing condition, not a woman to use for an example) is that it truly takes until 2014 for any significant benefit to be available. That said, it says that within three months:
He can get subsidized coverage through a new high-risk insurance program until 2014. The premiums for the program will be “established for a standard population,” according to the Kaiser Family Foundation. His out-of-pocket medical costs will be capped at $5,950.
It's a start. For the married couple who own a small business they, too, receive only a tiny benefit between now and 2013. Again it is a step in the right direction and sounds good on paper, but for a struggling business owner, it might not be enough to bridge the gap.
Another view of the health care bill for freelancers and small businesses shares more information in good, plain English.
I’m a small business owner with no employees. Sole proprietors or small businesses without full-time employees fall under the “self-employed” categorization above. The same rules apply – you must have coverage or pay a penalty for opting to go without.
I own a small business, and I have employees. How the new law affects you depends on how many employees you have. Businesses with fewer than 25 employees that pay an average of no more than $40,000/year will get a tax credit – up to 35 percent of the company’s share of their total health care premium – if they offer health coverage to their workers. Companies with 26-49 workers are unaffected – no additional tax credit, but no penalties for not offering coverage. The biggest change is that employers with more than 50 full-time equivalents (FTE’s) will be considered large employers.
BusinessPundit chimes in with "What Health Care Reform Means for Small Business".Most importantly, a good definition of the definition of a small business.
How does the government define a small business? According to the federal government, a small business is company with fewer than 100 employees. Your state may define a small business differently, eg. as a company with fewer than 50 employees. Check with your state to be sure.
It's a worthwhile read, because it is truly broken down in all the details. Interpretation and actual implementation is always hard to fully predict with these things, but perhaps this round-up will help you make better sense of the health care bill as it relates to being self-employed. Feel free to add to the discussion in the comments with your thoughts and any additional links you've found helpful.
Paula Gregorowicz, owner of The Paula G. Company, offers life and career coaching for women to help you boost your confidence and break through your limitations so you can re-ignite freedom and a sense of adventure in your life. Get the free eCourse "5 Steps to Move from Fear to Freedom & Experience Greater Confidence" at her website.