Trumpcare: What small businesses should do now

Whether Republicans in Congress coalesced during the handful of days between my writing this column and you reading it and passed some version of the American Health Care Act (Trumpcare); decided instead to seek a different solution; or abandoned the AHCA and started over, there are three things you as a business owner probably should do now:

• Talk with your health insurance broker, your HR benefits specialist and, perhaps, your employment attorney. Depending on the status of Congressional activity, a phone call or two might be enough; a get-together with all three might be better.

Even if the AHCA remains in a state of flux, a reach out for information may be wise.

• Bone up on Health Savings Accounts. HSAs have consistently been part of the proposed legislation and could become an option for businesses that choose to drop coverage when the employer mandate goes away.

• Wait. Even if the Republicans get a replacement for Obamacare passed, figure on lawsuits and other delaying tactics. Even so, and with his tongue only partly in his cheek, Oak Park attorney and benefits specialist Larry Grudzien says that Republicans "will have to act fairly quickly. The 2018 (Congressional) elections are not that far away, and they'll need something in effect by January so voters will have two or three months to judge the new plan before elections begin."

Here's what we think we know now:

• The employer mandate to provide health insurance coverage to employees likely is gone. That means you could drop that benefit cost when your current plan runs out, although eliminating health coverage is not likely to endear you to your employees.

• Health Savings Accounts mostly are in Trumpcare and could be an effective substitute for health coverage you now provide. HSAs are funded by pretax contributions from employees, although employers can contribute. Within IRS-determined limits, employees decide how much money to put aside in an HSA to pay health care costs.

Grudzien and others note, however, that lower-income workers likely can't afford much in the way of HSA deposits.

HSA funds are intended to be used by individuals and families to cover the expenses that come with a high deductible health plan that, by existing law, is part of the HSA process. For 2017, the maximum contribution to an HSA is $3,400 if the funds cover only the employee, $6,750 for family coverage. The AHCA would significantly increase those limits.

• The 3.8 percent tax on investment income and the 0.9 percent surcharge on Medicare taxes imposed on high-income taxpayers to help fund Obamacare likely are gone.

• Trumpcare does not require individuals to purchase health coverage, as Obamacare did. However, any break in coverage of 63 consecutive days apparently will result in a one-year, 30 percent surcharge on monthly premiums.

There's more, but these seem to be the basics business owners should watch.

• Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Listen to Jim's Business Owners' Pod Talk at www.kendallcom.com/podcast. © 2017 Kendall Communications Inc.