Since the enactment of federal health care reform, hundreds of thousands of small business owners across the country have been able to claim a tax credit for offering their employees health benefits -- and millions more are eligible, according to a report released today by advocacy group Small Business Majority and consumer group Families USA. For tax year 2011, seven in 10 small businesses with 25 or fewer employees are eligible for the credit.
But most striking is that the majority of entrepreneurs don't even know this credit exists.
American small businesses employ millions of workers and create 65 percent of all net new jobs. They can be found in every pocket of the country, driving growth in metropolitan cities, suburban settings and rural towns. Small businesses hold an iconic position in the American consciousness -- a position that sometimes makes it easy to forget how much they struggle to achieve that deserved recognition.
The reality is, most small businesses operate within thin profit margins. And that means they're less likely than big businesses to be able to afford health coverage for their workers. It's a decades-old problem that the Affordable Care Act was designed specifically to address. According to the report released today, more than 3.2 million small businesses employing 19.3 million Americans are eligible for the healthcare tax credit included in the law to help offset their premiums. Erica Hawthorne, the marketing manager for Ken Weinstein's Philadelphia, Penn. Trolley Car Diner, is one of those 19.3 million.
Erica reports that Ken received a tax credit of 19 percent of his premiums, and that she has directly benefited. After being on an individual plan, Erica was able to gain better insurance when Ken decided to expand employee coverage after receiving the credit. "Offering employee health benefits has helped the business attract and retain staff," Erica said. "When I was able to switch over to the group plan, I saw a significant change in my premiums. It really increased my take-home pay. From an employee perspective, offering health insurance adds to the entire package of any job. It's mutually beneficial for a business and its employees."
Entrepreneurs like Ken are using their tax credit savings t0 boost benefits, hire new workers and more. With $15.4 billion available for this year's credits alone, eligible small business owners and their employees stand to reap big savings. That $15.4 billion amounts to an average of $800 per employee, or $1,066 at businesses that qualify for the maximum credit of 35 percent of their 2011 premium costs.
According to the report, two in five eligible businesses should qualify for the 35 percent maximum (which in 2014 will jump to 50 percent). Those who think they might be eligible should talk to their accountants, but to meet basic qualifications, owners must have fewer than 25 full-time employees and pay at least 50 percent of their premiums.
Unfortunately, not nearly as many employers who are eligible for this benefit have taken advantage of it. This is largely due to small business owners' overall unfamiliarity with this provision of the Affordable Care Act. Our national opinion polling found 57 percent of small business owners have never heard of the tax credit. For the sake of these small businesses, it's imperative lawmakers and small business groups spread the word about this and other provisions in the law that will help boost entrepreneurs' bottom lines. These individuals -- the cornerstone of state and local economies -- are doing everything they can to build up their companies right when our nation needs it most.
Follow John Arensmeyer on Twitter: www.twitter.com/SmlBizMajority
If that is all paid for by the Employer? That would be a $150 wk Raise for Single Employees and $300 wk Raise for an Employee with a Family
Planned -Required Participation Rates apply as well, most Ins. Co. require at least 75% participate
Which of you want to Pay that out of your Paycheck ? While the Ave income is $600 wk ?
They are making such a big deal out of a .16 cent price drop. But they fail to remind us that the price of fuel has almost doubled in the last 3 years. Smoke screen.
You want To make More $, but you don't want anyone else too?
Thanks..
If you don't have a Home or Savings, what do yuo care if you get a $50,000 Hospital Bill or not?
You just file Bankrupcty and go your way..Don't bother paying for Insurance
It's for the Wealthy and Rich