Small Business Getting Health Care Employment Benefits Help

For decades, America's small-business owners have asked for more affordable health insurance coverage and more tax relief. The new health reform law-the Patient Protection and Affordable Care Act-provides both.

First, it offers tax credits for small employers who pay at least half of their employees' health insurance premiums. Starting this year, businesses with fewer than 25 employees who make an average of $50,000 or less may be eligible for a credit of up to 35 percent of the premiums they pay on their employees' behalf. For small non-profits, it's up to 25 percent.

In 2014, those credits will increase to up to 50 percent and 35 percent, respectively.

Also in 2014, health insurance "exchanges" for small businesses will open in every state.

Currently, small businesses pay as much as 18 percent more than large firms for the same coverage. The exchanges will allow businesses with as many as 100 employees to pool their risk, lower their administrative costs and negotiate more effectively with insurance companies. The Congressional Budget Office estimates this could help drive down premiums by as much as 4 percent in the marketplace of small-business health plans.

The tax credits and the exchanges are just two of the new tools that will help small businesses get health insurance, some for the first time.

Even if a small-business owner with 50 or fewer employees decides not to buy health insurance with these incentives, there is no penalty. These small businesses are exempt from the employer responsibility provision of the new law. In this case, small-business workers will be able to use individual tax credits to shop for insurance in the exchanges. And it's important to note that 96 percent of businesses with more than 50 employees already offer coverage.

The new law also will prohibit insurance companies from dramatically increasing premiums for a small business just because one worker gets sick.

Overall, the health reform act is a critical tool that will help millions of small-business owners provide health insurance to people they often consider to be members of their extended family-their employees.

As a nation, we owe them nothing less as they work to grow, create jobs and lead us toward full economic recovery.

Franklin J. Sciortino is the U.S. Small Business Administration's Buffalo District director. For more information on the Patient Protection and Affordable Care Act, visit www.sba.gov.