Study: Health Overhaul’s Tax Credit For Small Business Could Affect Millions
A new Commonwealth Fund report estimates that "about 16.6 million workers are employed by small businesses that are eligible for health insurance tax credits" under the new health law but only 3.4 million of them are at companies that will take advantage of the credits, The Washington Post reports, adding that those businesses already offer their employees health insurance. "Those firms that do not offer coverage are unlikely to consider the tax breaks enough of a financial incentive to start doing so, according to the report's authors. Still, the authors stressed the potential stimulus benefits of the tax credits, which apply beginning this taxable year and will increase in value in 2014 from as much as 35 percent of an employer's premium contribution to as much as 50 percent" (Aizenman, 9/2).
The Baltimore Sun: "Coverage provided from such firms has eroded over the last decade. While 98 percent of companies with 200 or more employees offer health insurance, only 46 percent of companies with fewer than 10 employees do. ... The report notes that the Congressional Budget Office estimates that small businesses could get $40 billion in credits in the next decade and reduce the premiums they pay 8 to 11 percent by 2016" (Cohn, 9/2).
Modern Healthcare: The credit expires in 2016. "'It is really an economic stimulus measure that will help small businesses get through these tough economic times,' said Karen Davis, president of the Commonwealth Fund" (Vesely, 9/2).
Los Angeles Times: In the meantime, a Rand Corp. simulation estimates the number of workers who have access to health care through their jobs will increase from around 84 percent to nearly 95 percent, once health insurance exchanges are up and running. "Most of that bump is likely to come from smaller businesses with 50 or fewer employees. Today, only 60.4% of these employees can get health insurance through their jobs. Once the exchanges are functioning, the Rand researchers forecast that 85.9% of small business employees will have the option of buying health plans at work an increase of 10.5 million workers" (Kaplan, 9/1).
An insurance exchange has recently opened to businesses with fewer than 50 employees in Utah, the Deseret News reports. "Rather than have one or two options that are pre-selected by their employers, workers can choose from more than 60 different plans from four of Utah's largest insurance companies: Humana, Regence, Select Health and United Healthcare. By state statute, all plans offered through the Utah Health Exchange must meet federal standards for employer-sponsored coverage, which ensures all plans offered provide quality coverage from responsible carriers. It is also expected that the element of consumer choice - employees selecting their plans directly from carriers - will put downward pressure on prices and upward pressure on coverage quality" (Leonard, 9/1).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.