Many Center for Rural Affairs supporters are farmers, ranchers, or small business owners who operate their enterprise as a sole proprietorship, rather than an incorporated business. The new health care law impacts sole proprietors and their families differently than it impacts incorporated businesses.

Benefits to Sole Proprietors and All Americans
Sole proprietors and their families enjoy reforms to the insurance market including ending discrimination by insurance companies based on pre-existing conditions and gender, eliminating lifetime caps on insurance spending, restricting annual caps, and ending the practices by which health insurance companies retroactively terminate a policy when someone becomes sick.

Sole proprietors and their family member employees are also eligible for insurance premium subsides and credits to lower premiums. The amount of the premium subsidies and credits are figured on a sliding scale, with those who make less getting a bigger credit and those who make more getting a smaller one.

Cost-sharing requirements are available to individuals and families with incomes below 400 percent of the federal poverty line (below $88,000 a year for a family of four) who purchase coverage in the newly established exchanges. Health Insurance Exchanges (beginning in 2014) act as a regulated marketplace of insurance plans with different tiers, or levels of coverage. The exchange will offer only plans that meet a minimum benefits level and include other consumer protections.

Small Business Tax Credits and Sole Proprietors
Sole proprietors and their family member employees are not eligible for the transitional small business tax credits that begin in 2010. However, sole proprietorships are able to receive small business tax credits for providing their non-family employees with health insurance if they meet the other eligibility requirements for the small business tax credit, including:

• having fewer than 25 full-time equivalent employees
• supplying average annual wages of less than $50,000
• purchasing health insurance for employees
• contributing at least 50 percent of the cost of the premium.

Please contact Virginia Wolking at the Center for Rural Affairs if you are a sole proprietor with questions on health care reform. Call 402.687.2103 x 1017 or email virginiaw@cfra.org.