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Washington Watch - September 29, 2010


Small Business Jobs & Credit Act Signed Into Law

On Monday, President Barack Obama signed into law legislation that will allow the self-employed to deduct their health insurance costs as a business expense for payroll tax purposes. Though only applicable to 2010 tax returns, the passage of this proponent is a key “foot in the door” for future battles on health costs and the self-employed, according to the NASE.

Before signing the bill, President Barack Obama offered a few remarks:

Now this is important because small businesses produce most of the new jobs in this country.  They are the anchors of our Main  Streets.  They are part of the promise of America – the idea that if you’ve got a dream and you’re willing to work hard, you can succeed.  That’s what leads a worker to leave a job to become her own boss.  That’s what propels a basement inventor to sell a new product – or an amateur chef to open a restaurant.  It’s this promise that has drawn millions to our shores and made our economy the envy of the world.

“The NASE lauds the Administration and Congress for passing this small business legislation into law,” remarked NASE Executive Director Kristie Arslan. “It is imperative that lawmakers continue to focus on small business policy that helps the majority of the business community – the self-employed.”

The one-year tax deduction for sole proprietors on health care costs for payroll tax purposes on their 2010 tax returns is expected to save self-employed business owners approximately $456 to $968 in taxes next year. This is a significant bottom-line cost savings in this difficult economic climate. 

Additionally, the temporary provision will provide a one-year level playing field for America’s smallest businesses that have not benefited from the same tax treatment of health care costs that all other businesses have enjoyed.

To learn more about the qualifications and requirements to benefit from this one-year tax deduction, please visit NASE In Action for an informational sheet on this important provision.

The NASE, in coordination with the coalition supporting Equity for Our Nation’s Self-Employed, will continue efforts to make this tax benefit permanent for self-employed Americans.


How To: One-Year Tax Deduction On Health Costs For The Self-Employed

On September 27, 2010, the Small Business Jobs and Credit Act of 2010 (H.R.5297) was signed into law. The legislation provides an important tax break for the over 23 million self-employed Americans that represent 78 percent of all small businesses in the U.S. 

Here is some guidance to determine whether you can benefit from this new deduction: What You Need To Know About the One-Year Tax Deduction On Health Costs for the Self-Employed


HealthCare.Gov: New Health Care Law Provisions Kick In

The website HealthCare.gov, which is managed by the U.S. Department of Health and Human Services, recently released several new changes to our health care system that have just gone into effect as a result of the health reform law. These reforms will apply to all new health plans, and to many existing health plans as they are renewed.

According to the site, insurers will no longer be able to:

  • Deny coverage to kids with pre-existing conditions. Health plans cannot limit or deny benefits or deny coverage for a child younger than age 19 simply because the child has a pre-existing condition like asthma.
  • Put lifetime limits on benefits. Health plans can no longer put a lifetime dollar limit on the benefits of people with costly conditions like cancer
  • Cancel your policy without proving fraud. Health plans can’t retroactively cancel insurance coverage – often at the time you need it most - solely because you or your employer made an honest mistake on your insurance application.
  • Deny claims without a chance for appeal. In new health plans, you now have the right to demand that your health plan reconsider a decision to deny payment for a test or treatment. That also includes an external appeal to an independent reviewer.

Consumers in new health plans will be able to:

  • Receive cost-free preventive services. New health plans must give you access to recommended preventive services such as screenings, vaccinations and counseling without any out-of-pocket costs to you.
  • Keep young adults on a parent’s plan until age 26. If your health plan covers children, you can now most likely add or keep your children on your health insurance policy until they turn 26 years old if they don’t have coverage on the job.
  • Choose a primary care doctor, ob/gyn and pediatrician. New health plans must let you choose the primary care doctor or pediatrician you want from your health plan’s provider network and let you see an OB-GYN doctor without needing a referral from another doctor.
  • Use the nearest emergency room without penalty. New health plans can’t require you to get prior approval before seeking emergency room services from a provider or hospital outside your plan’s network – and they can’t require higher copayments or co-insurance for out-of-network emergency room services.

Visit HealthCare.gov for more detailed information.

Read a roundup of articles on this topic at Kaiser Health News.


House Looking Less Likely To Take Up Expiring Tax Provisions Before November Elections

Speaker Nancy Pelosi, D-Calif., and other House leaders have yet to make a decision on continuing to pursue an extension of the expiring Bush tax cuts to all but the wealthiest Americans (top two tax brackets). Leaders have also neglected to begin counting votes of support among Democrats at this stage.

Vulnerable House Democrats are leery about taking up the vote before the November elections, especially those who are campaigning in Republican-leaning districts. Republicans have rallied to extend the tax cuts for all individuals, whereas Democrats in both chambers have sought to permanently extend tax cuts for only those making less than $250,000 a year.

The Senate decided last week that they would wait until after the November elections to take up the tax cuts.

Watch House action at House.gov.


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Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.

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