In the spirit of this holiday season, the Wisconsin Alliance for Women’s Health invites you to share in a series of blog posts, each containing a special “gift” from health care reform. Some have already been implemented and some are gifts still to come; but all are very important improvements to our healthcare system.
Gift Eleven: Benefits for Small Businesses
Rising costs to health care can be especially burdensome to small business owners who want to offer coverage to their employees. A Kaiser study recently reported that 54% of small businesses – with fewer than ten employees – do not offer health benefits. Twenty-eight percent of those who are self-employed also are not insured. Furthermore, small businesses pay an average of 18% more than large companies for their coverage.
To help small businesses provide health care benefits to their employees, the health care reform law provides eligible businesses with tax credits. To protect consumers, the plans qualified for tax credits must be qualified health plans and offer comprehensive coverage. The tax credits come in a series of two phases. One of the phases went into effect in January 2010 and we can expect the second phase in January 2014.
Phase one: Provides a credit worth up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit.
Phase two: Provides a credit is up to 50% of the employer’s contribution to provide health insurance for employees. There is also up to a 35% credit for small non-profit organizations.
To be eligible to receive the tax credit you must meet the following criteria:
- Cover at least 50% of the premium for single coverage for each employee
- Have fewer than 25 full time equivalent employees. Two half time employees count as one full time employee.
- Employees must have an average wage less than $50,000 a year.
Yesterday, we blogged on the Exchanges and tax credits. Small businesses – less than 100 employees or less than 50 employees depending on the state’s decision – will also have access to Small Business Health Options Program – or SHOP Exchange. This will allow for more options for affordable plans that employees can choose from. Individuals who are eligible will still be able to receive tax credits towards premiums and “phase two” employer tax credits will only be offered to qualified participants within the SHOP Exchange.
Health care reform and small business benefits are especially beneficial for women. Health insurance plans – starting in 2014 – will no longer be able to discriminate based on gender – historically women have paid higher premiums for the same plans as men. For businesses that are primary staffed by women, gift eleven and other reforms come with many advantages.
We hope you enjoyed each of the “gifts” we’ve posted so far. In case you missed any of these wonderful health care reform gifts, check in tomorrow for our recap and final comments.