Affordable Care Act

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law. This legislation, commonly known as the “Health Care Law,” contained several provisions which will affect small business owners and Individuals responsible for purchasing their own health insurance. Several of the provisions were implemented immediately while others will be slowly phased in over the next several years .

How the Affordable Care Act affects you:

In 2014, all Individuals must purchase health insurance or they will face a $695 annual fine. There are some exceptions for people with lower incomes.

Uninsured or self- employed individuals will be able to purchase health care through a state-based exchanges with subsides for business starting in 2014. A “state based exchange” is where people can exchange tax credits for private insurance or programs like the Children’s Health Insurance Program.

Individuals are eligible for this program are those making only slightly more than the poverty threshold of $22,050.
Separate exchanges would be created for small businesses to purchase health care coverage starting in 2014.
Insurance companies may no longer deny children health insurance based on a preexisting condition. Adults will not get the same protection until 2014.
Children are permitted to stay on their parent's insurance plans until age 26. This provision starts immediately following the bill being signed into law. This is one of the few provisions in the bill that takes effect immediately.
Around 4 million small businesses have an opportunity to receive tax credits for providing health care to employees. The Affordable Care Act immediately provided a credit worth up to 35% of the employer’s contribution to the employees’ health insurance while non-profit organizations may receive up to a 25% credit. Those credits will increase starting in 2014 to 50% for small business employers and 35% for non-profits.

Specific provisions affecting the self-employed:

If your state allows self-employed residents to buy small employer health insurance, then individuals will have similar options as “small employers”. Find out if you qualify by visiting your State Department of Insurance. Or find additional consumer assistance in your state.
If your state does not allow self-employed residents to buy small employer health insurance, then you will have the same options as someone buying an individual health insurance plan. Learn more about your full range of public and private health coverage choices in the insurance and coverage finder. You can also find more information about a variety of health insurance alternatives in the Insurance Choices section.
If you’re self-employed and have bought health insurance, the cost of the health insurance may be deductible from your federal taxes. Learn more about the self-employed health insurance deduction.

Click here to find out what the Affordable Care Act will specifically mean for you.

Note: The Affordable Care Act is subject to potential changes from the Supreme Court. America’s highest court has agreed to hear a challenge to the constitutionality of the legislation beginning at the end of March 2011. While it is unknown how the court will rule, constitutional scholars predict that the focus of the court case will be on the mandate that requires all Americans to purchase health insurance.

Stay tuned for more information on the case as it develops.