Focus on Health Care
Tax and Credit Committee addresses Obmacare.
by Troy Smith, field editor
NASHVILLE, Tenn. (Feb. 6, 2014) — Impacts the new health care law is having or is likely to have on farms, ranches and feedlots as employers was a subject of much interest to National Cattlemen’s Beef Association (NCBA) members attending the 2014 Cattle Industry Convention in Nashville, Tenn. Attendance was high at NCBA’s Tax and Credit Committee, where guest speaker Matthew Turkstra talked about how the effects of “Obamacare” will vary relative to business size.
Turkstra said the health care law is just one of numerous interests that cattlemen share with some 350,000 small businesses represented by the National Federation of Independent Business (NFIB), for which Turkstra serves as manager of legislative affairs. Turkstra said many cattle operations must be prepared to deal with tax and regulatory consequences of the Patient Protection and Affordable Care Act. Unfortunately, it is not easy to understand in its present form, and it may change.
“The rules are very complicated,” affirmed Turkstra, explaining that implementation of certain requirements originally written into the law have been delayed until 2015. The law already calls for revision of some of those requirements by 2016. Additionally, Turkstra said the health care law establishes 14 new taxes affecting small businesses.
“The law does impact businesses differently, depending on whether they are large or small, and whether they currently offer health insurance to employees,” said Turkstra, “and each state’s experience will be different, depending on its participation in Medicaid.”
Turkstra said it is clear that large businesses must offer health insurance or pay penalties. Large businesses are those with 50 or more full-time employees, and the health care law defines “full-time employee” as those working 30 or more hours per week. Insurance offered by large businesses must not exclude pre-existing conditions and must not have annual or lifetime caps on benefits. If a group plan is offered, the employee share of premium cost must not exceed 40%, and there can be no cost-share requirement for preventive care services. Employees’ dependent children are covered until age 26.
“Rules for small businesses are different,” said Turkstra, explaining that there is no mandate for businesses with fewer than 50 employees to offer health insurance. If small businesses do offer coverage, deductible limits are $2,000 for an individual and $4,000 for family coverage. Dependent coverage is not mandated.
Small businesses that do offer employee health insurance are eligible to use “exchanges” from which they may choose policies eligible for federal subsidies. However, Turkstra said online enrollment has been delayed until 2015.
“This law only works if the insurance companies participate, but the government can’t force them to,” offered Turkstra, who also expects increased consolidation of the insurance industry.
Committee members also heard a report on tax reform efforts from NCBA Associate Director of Legislative Affairs Kent Bacus. He said congressional representatives have engaged in serious discussion of tax reform, for the first time in many years. Unfortunately, discussions came to a screeching halt when Senate Finance Committee Chairman Max Baucus of Montana was appointed U.S. Ambassador to China.
"The pathway forward is unclear,” said NCBA’s Bacus. “There has been some effort toward tax reform in the House Ways and Means Committee, and President Obama has called for reforms, but it’s going to be hard to get anything done before legislators shift more of their attention to congressional campaigning.”
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