Companies consider implications of health reform for small business

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In light of the historic healthcare reform recently passed, many families and young professionals are investigating how their medical coverage will change. At the same time, many businesses are considering how their taxes might change.

A report for the Wall Street Journal suggests the reform might be costly for businesses at first. Verizon Communications, for one, said that it will pay $970 million in the first quarter of 2010 in light of the new health legislation.

The source predicts that tax bills for businesses will go up. Effective in 2013, companies will no longer receive tax-free subsidies they received from the government for providing retirees with prescription benefits.

Nonetheless, the administration says many companies are exaggerating the impact of the new system in terms of tax increases. In fact, a report from the Council of Economic Advisors indicates that the new healthcare system will alleviate the fees small business and employees face and increase entrepreneurs’ abilities to provide healthcare for workers.

Regardless of the consequences of the bill, its passage might inspire business formation. All business types might benefit from extended coverage for workers and business incorporation offers a number of tax benefits that might help outweigh the cost of any lost deductions.