Small businesses can get tax incentives for offering health insurance to employees listen09/23/11 Janelle Irwin
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It may be less expensive for small businesses to offer health insurance to their employees because of the Affordable Care Act. Thatâ€™s because some business may qualify for tax incentives under the health care reform law.
Over half of small businesses with fewer than 10 employees donâ€™t offer health insurance. Patrick Cannon is the advocacy director for Floridaâ€™s Community Health Action Information Network, or CHAIN. He says the rising cost of health care makes providing health benefits nearly impossible for many business owners, but there are ways to offset rising costs.
â€œFor businesses under 25 employees they can get a tax credit up to 35% to help defray the costs of the premiums that employers pay for their insurance. And that credit goes up to 50% in 2014 and you can be a for profit and a not for profit business and you can still be eligible for the tax credit.â€
The tax incentives are available to most businesses with less than 100 employees. Deadlines have passed for 2010 taxes, but that doesnâ€™t mean qualifying companies canâ€™t still take advantage of the break by amending them. To add to employer benefits, the Affordable Care Act is also phasing in a system of insurance exchanges that Cannon says they will offer savings and simplicity.
â€œEssentially itâ€™s going to be an online insurance shopping experience where you can go compare different plans that will be standardized based on four levels like, bronze, silver gold and platinum. And even the bronze level will be solid coverage. And for the first time people will really be able to compare apples to apples when theyâ€™re shopping for insurance.â€
Small Business Majorityâ€™s Jessica Stone said provisions in Obamaâ€™s health care reform will help smaller businesses compete with corporate giants.
â€œSmall firms pay about 18% more on average than large firms do. Thatâ€™s because small businesses donâ€™t have the ability to come together and spread risk over a larger number of people like larger businesses are able to do. They also arenâ€™t able to negotiate with insurance carriers for affordable health plans like, for example, Coca-Cola or Cisco or large companies are able to do because they have that purchasing power.â€
Before the health care reform law passed, some workers suffering from chronic illness or sudden medical needs were under-insured. Stone said some revisions have already taken affect and more are soon to follow.
â€œThis includes a ban on health plans from dropping insurance coverage when an individual gets sick or they get into a car accident. Insurers are also not able to deny coverage to children with pre-existing conditions, and as Patrick mentioned, come 2014 that will be the case for adults. Thereâ€™s a ban on lifetime caps that rescind coverage when individuals get sick. Weâ€™ve heard this from some businesses that theyâ€™ll have an employee that comes down with a very tough illness or ends up in an accident and will reach that lifetime or annual cap and now as a result of that law the lifetime caps are eliminated.â€
President Barack Obama pushed for a large-scale overhaul of the nationâ€™s healthcare system soon after entering the White House. Opponents have come to call the series of reforms, â€œObamacareâ€. But CHAINâ€™s Patrick Cannon said most people only hear the politics behind the policy.
â€œThe information that people are getting about the Affordable Care Act is typically more about news events then it is about the actual content of the law. So I think most people just donâ€™t know whatâ€™s in it and they hear things, rumors, death panels and how, you know, youâ€™re not going to be able to see your own doctor and they believe that.â€
For more information about small business benefits through the Affordable Healthcare Act visit the Florida CHAIN website.