President Obama has signed the health care reconciliation measure (H.R. 4872), completing Congress' work on health care reform.   The first part of health care reform legislation, the  Patient Protection and Affordable Care Act (PPACA), was signed into law on March 23.  Health care reform legislation is estimated to cost $940 billion over ten years and to reduce the federal deficit by $138 billion over the same ten years.

Key provisions of the health care reform legislation include:

• A tax credit beginning in 2010 through 2013 for businesses and 501(c) organizations with less than 25 employees and average wages below $50,000. The tax credit may be applied to payroll taxes.  During those three years, the bill permits a credit for all eligible small employers that provide insurance for their employees and, beginning in 2014, credits are available to employers purchasing employee coverage through health insurance exchanges. (The Act states that seasonal workers of an employer shall not be taken into account in determining the full-time equivalent employees and average annual wages of the employer unless the worker works for the employer on more than 120 days during the taxable year.)
• A state-based health insurance exchange program to facilitate enrollment for individuals and small businesses. The Act also provides individual tax credits based on income to make purchasing coverage more affordable.  The Exchanges become effective in 2014.
• A requirement that employers with more than 50 full-time employees, that do not offer health coverage, must pay a fee of $2,000 to the federal government for each uncovered employee, with the first 30 employees being exempt from this fee.
• A requirement that health plans give the option for young people up to the age of 26 to remain on their parents’ insurance policy, at the parents’ choice, effective 6 months from enactment.
• A mandate that individuals shall not be denied coverage based on pre-existing conditions.  In addition, health insurance companies are prohibited from increasing premium rates due to pre-existing conditions or gender.
• A requirement that all U.S. citizens and legal residents obtain health insurance or pay a penalty of up to $695 per adult.

Resources:

How to Claim the Small Business Health Care Tax Credit
The IRS has released updated information on how to claim the Small Business Health Care Tax Credit. The IRS also announced how eligible tax-exempt organizations will claim the credit during the 2011 filing season. Both small businesses and tax-exempt organizations will use Form 8941 (still in draft format) to calculate the credit. For more information, you may visit the following IRS Press Release and IRS FAQ.

IRS:  Tax Credit Helps Small Employers
http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6

IRS: Video on Health Care Reform and Small Business
http://www.youtube.com/watch?v=ChZxszgS_1M

Independent Sector:  Health Care Reform & the Tax Exempt Community
http://independentsector.org/programs/gr/HealthCareReform.htm
http://independentsector.org/programs/gr/HealthCareReform_Proposed_Legislation.htm

Congressional Budget Office, Health Care Legislation
http://www.cbo.gov/publications/collections/health.cfm