Making Health Insurance More Affordable for Small Businesses

Mark Hodesh, the owner of a home-and-garden shop in downtown Ann Arbor, MI, thinks there’s a lot of misinformation about the Affordable Care Act and its impact on small-businesses like his: “A lot of people say it’s a job killer. In my experience, it’s a job creator.”

To maintain a strong staff for the past 12 years, Mark works to provide health care coverage to his full-time employees and sees it as a key component to the store’s success. As Mark says, “We rely on long-term, well-informed good employees to compete with our box-store competition. The best way I know how to attract and keep good people is to have a good benefits package. Health care is a big part of that.”

The Affordable Care Act allows employers to claim a tax credit for up to 35 percent of their health insurance premiums. Mark says that while his insurance rates have skyrocketed over the past 10 years, the tax credit gave him the ability to hire another employee to his current staff of twelve.

The health care law’s tax credit has lowered health insurance costs for small-business owners, who on average have paid about 18 percent more than large firms for the same health insurance policy.

Starting in 2014, the small-business tax credit goes up to 50 percent for qualifying small businesses who will have access to a choice of private health plans through State-based Affordable Insurance Exchanges.

Other provisions of the Affordable Care Act have also been important to Mark’s employees, such as barring insurers from discriminating against children with pre-existing conditions; in 2014, no one can be denied coverage due to pre-existing conditions.  The health care law also prohibits low annual and lifetime limits on how much care insurers cover.

Additionally, Mark, his employees and millions of other Americans with private insurance or Medicare are able to get many preventive care services, such as flu shots, cholesterol screenings and cancer screenings like mammograms and colonoscopies with no co-pay or deductible.

And, thanks to the Affordable Care Act, small businesses are no longer in the dark about their health insurance premiums. Now, insurance companies are required to justify rate increases of 10 percent or higher. This has contributed to a decline in rate increases; in the last quarter of 2011 alone, States reported that premium increases dropped by 4.5 percent.

The health care law is giving small businesses more affordable options for health care and health insurance coverage, and as Mark says: “The Affordable Care Act is making it easier for us to do better.”