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16.6 million small business employees could benefit from ACA provisions starting this year
Date:9/1/2010

New York, NY, September 2, 201016.6 million small business employees work in firms that will be eligible for tax credits under the Affordable Care Act (ACA), according to a new Commonwealth Fund report. The credits, designed to offset health insurance premium costs and help small businesses afford and maintain health insurance, are available in taxable years beginning in 2010. Researchers estimate that by 2013, 3.4 million workers may work in firms that take advantage of the tax credit. The tax credits increase in value in 2014, from up to 35 percent of the employer's premium contribution to up to 50 percent.

The report, Realizing the Potential of Health Reform: Small Businesses and the Affordable Care Act of 2010, finds that relief for small businesses is greatly needed, as most of the erosion in employer health coverage over the last decade has taken place in small firms. Nearly all firms (98 percent) with 200 or more employees offer health benefits compared to only 46 percent of firms with fewer than 10 employees. In addition, 52 percent of workers in firms with fewer than 50 employees are uninsured or underinsured.

Report authors and Commonwealth Fund researchers Sara Collins, Karen Davis, Jennifer Nicolson, and Kristof Stremikis, note that small businesses are the first group to receive direct subsides under provisions of the Affordable Care Act. The Congressional Budget Office (CBO) estimates that the tax credits could provide up to $40 billion in support to small businesses over the next 10 years and reduce their health insurance premiums 8 to 11 percent by 2016, the report states. Additional savings will be realized by 2020 through provisions that reduce administrative spending and increase competition among insurers participating in insurance exchanges.

"The Affordable Care Act is a big step forward for small businesses and their employees," said Commonwealth Fund President Karen Davis. "Not only will business owners see immed
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Contact: Mary Mahon
mm@cmwf.org
212-606-3853
Commonwealth Fund
Source:Eurekalert

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