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 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 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.
EXEMPTION FROM RESPONSIBILITY TO OFFER COVERAGE
The reform exempts all small firms with fewer than 50 employees from the employer responsibility requirements that begin in 2014. 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.
HELP WITH WELLNESS & PREVENTION
Small businesses that want to promote healthy behavior have access to health plans for their workers that provide free preventive care.
IMMEDIATE HELP FOR THE UNINSURED
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.