The Affordable Care Act: Helping Small Business Afford Quality Coverage

Small businesses make up 73.6% of all Pennsylvania businesses, yet just 48.7% of these small businesses are able to offer health insurance to their employees.

Nationally, of the 50 milion Americans without health coverage, 28 million are small business owners, workers, and their families.

While the overwhelming majority of small businesses feel that it's the right thing to offer coverage, many have been priced out of the market, forced to lose talented workers and hampered in their ability to grow and thrive. 
 
Thanks to the Affordable Care Act, small businesses are no longer on their own when it comes to finding and keeping affordable health coverage. The new law offers substantial tax credits to small employers to help offset the cost of offering coverage to employees and boosts small businesses bargaining power.
 
NEW TAX CREDITS -- Making Coverage Affordable

Effective September 23, 2010, small businesses that pay at least 50% of their employees’ health insurance premiums and have less than 25 full-time workers with average annual wages below $50,000 are eligible for new tax credits up of to 35% per employee covered (the owner's salary is excluded in this calculation). Tax-exempt businesses like non-profits are also eligible, although the credit is slightly smaller (25%).

These tax credits will increase from 35% of premiums (what the employer pays to cover each employee) to 50% for for-profit employers and from 25% of premiums to 35% of premiums for non-profit employers in 2014.

Families USA estimates that the 151,000 Pennsylvania small businesses eligible for these new tax credits employ 654,689 Pennsylvanians. These new tax credits will also be a boon to Pennsylvania's economy overall, with estimates showing that between 11,400-18,300 PA jobs can be created by reducing the burden of health care costs on small employers.

REAL CHOICES, MORE BARGAINING POWER

Small businesses will also enjoy greater bargaining power in 2014, when they will be newly-able to purchase coverage through the Health Insurance Marketplace

This new marketplace (sometimes called an "exchange") makes several key improvements on our current health care marketplace to increase competition, broaden the risk pool by including healthier people, and make sure that plans offer high value coverage at affordable prices.

Benefits of the Health Insurance Marketplace:

  • Insurers will compete -- on a level playing field -- for your business, based on price and quality.

  • You will have a new way to offer your employees choices among health plans, giving you the clout that large businesses benefit from when purchasing insurance. 

  • You can enjoy easily accessible, accurate, unbiased information (with easy-to-understand descriptions of covered benefits, cost-sharing, and satisfaction ratings) to help you choose a plan that's right for your business.