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Small Businesses

Utah small businesses and their employees fall through the cracks of our health care system

Hard Times Hurt Utah Small Business…

M. Smith owns a car, truck and tractor detailing company in Murray. This local small business does not offer health insurance for its 7 employees, and M. Smith is currently uninsured. “Our average employee wage is $9.00 an hour,” explains M. Smith. “Our company can’t afford to match the insurance premiums, but even if we could, our employees wouldn’t be able to afford their portion of the premium

M. Smith wanted to at least look into providing catastrophic insurance, but then the economic downturn hit. The company’s business dropped by 40% as customers came in less often and bought cheaper packages. “We are looking at anything and everything to keep our business going,” says M. Smith. Unfortunately, offering insurance is now totally off the table. This Utah small business just has to focus on surviving the recession.

The Patient Protection and Affordable Care Act Makes Health Insurance Affordable for Small Business Owners

In 2014, the reform creates Health Insurance Exchanges, or competitive marketplaces, where small businesses and their employees, the self-employed, and the uninsured can purchase affordable coverage. For the first time, small businesses owners like M. Smith will be able to pool their buying power and have access to the same quality plans only available to large firms today. Through the Exchanges, small business owners and workers can do one-stop comparison shopping for an affordable plan that offers lower rates like what big businesses pay; stable pricing from year to year; lower administrative costs, and choice of quality plans for employees.

Effective immediately, Health reform provides tax credits for small businesses to help them offer exempts all small firms with fewer than 50 employees from the employer responsibility requirements that begin in 2014. employee health insurance coverage—if they choose to do so. Small businesses that provide coverage for their workers will receive immediate help with their premium costs, and additional firms that initiate coverage this year will get a tax cut as well. This sliding-scale tax credit is worth up to 35 percent of a small business’s premium costs in 2010. On January 1, 2014, this rate increases to 50 percent. Firms can claim the credit for 2010 through 2013 and for any two years after that. To qualify for the tax credit, businesses must have fewer than 25 employees and average annual wages of less than $50,000—and the full tax credit is available to those with 10 or fewer employees and average annual wages of $25,000 or less.

Starting in 2014, affordable plans in Health Insurance Exchanges will have a guaranteed set of minimum benefits—to eliminate fine print surprises that often face those who don’t have the purchasing power of a large corporation or group.

The reform This means that 96 percent of all firms in the U.S. or 5.8 million out of 6 million total firms will be exempt. Many small firms that do not currently offer coverage will be more likely to do so under reform – because of new tax credits, lower premiums, and better choices.

For those small businesses with workers who have been uninsured for several months, or denied a policy based on “pre-existing conditions,” a high risk pool will immediately offer insurance, and assistance to help pay the premiums.

Small businesses that want to promote healthy behavior have access to health plans for their workers that provide free preventive care.