Small Business Health Insurance and Healthcare Reform

If you are employed by a small business, that is one with fewer than 50 employees, and currently are without health insurance, the recently passed Healthcare Reform Act can be good news for you.

It may be some time until small business owners and their employees reap the full benefits of the now passed Healthcare Reform Bill. Many of the provisions are directed specifically to creating more affordable small business health insurance plans. However, they do not all take effect until 2014. Still, healthcare reform is a light at the end of the tunnel for the millions of single individuals who work for small businesses and have not had access to low-cost health insurance benefits. 

Under the new law:

• By no later than 2014, states will have to set up Small Business Health Options Programs, or "SHOP Exchanges", where small businesses will be able to pool together to buy insurance.

According to the Congressional Budget Office (CBO), the ability for small businesses to pool should reduce the cost of purchasing small business health insurance plans by as much as 5%. Between now and 2014, until the Exchanges are set up, businesses with 10 or fewer full-time employees whose average earnings are less than $25,000 a year will be eligible for a tax credit of 35% of their health insurance costs. Companies with more employees, and/or with higher average annual salaries will be eligible for partial credits on a sliding scale.

These tax credits are the best news and biggest advantage to individual low-wage earning employees of small businesses who have not been able to afford health insurance. Even after the SHOP Exchanges are available in 2014, the tax credits not only remain in effect, but actually increase to 50% - for the first two years that your employer purchases his or her small business health insurance through the Exchange. Once this is in place, the CBO estimates that individuals purchasing small business group plans will save as much as 12% as compared to what is available in the private health insurance market today.

Other provisions in the plan that represent good health insurance news for everyone, not only those who are employed by small business include:

• Health insurers will no longer be able to set rate or exclude individuals based on pre-existing conditions.
• Companies with more than 50 employees will have to provide healthcare benefits for their workers or face fines and penalties. 

Through much debate and struggle - we now have a Healthcare Reform Bill that has become the law of the land. It may not be perfect - but it will make a difference for small business owners, their employees, and many more of the 40 million Americans who have not had access to affordable health insurance.

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