As we’re waiting for the Supreme Court to make its decision on the Affordable Care Act (“Obamacare”), we’d like to ask you a simple question. How much of the Affordable Care Act is worth keeping?
We’re asking you that because we came across this interesting article about the small business health insurance tax credit which was supposed to make health insurance more affordable for small businesses. Instead, it sounds like the small business health insurance tax credit may be more trouble than it’s worth:
Insurance is a significant expense, and more so for small businesses, simply because it costs more per employee when a company has fewer people to cover. According to a Department of Health & Human Services study in 2009, the average annual premium for an employee in a company with fewer than 10 employees was $4,982. That is a lot of money to small companies — 83 percent of which don’t offer health insurance, according to the Government Accountability Office, the investigative arm of Congress. (The average premium for companies of all sizes was $4,669).
The tax credit doesn’t factor in a small company’s decision to provide benefits, says Neil Crosby, a health insurance broker with Warner Pacific Insurance Services in San Diego. Crosby says many small businesses he deals with aren’t aware of the credit. And many of his clients who do try to get the credit find they don’t qualify.
But those who do succeed are glad to have some cash back from the government.
Matt Helbig was already providing health insurance for the eight full-time employees of his three running and walking shoe stores in the St. Louis area at cost of about $20,000 annually. He decided to try for the credit. He got back $1,900 for 2010, and $1,100 for 2011. The money came at a price — “it took our accountant a pretty significant amount of time to put it together,” says Helbig, CEO of Big River Running Co. His accountant’s fee for computing the credit last year came to $700.
Do you think the small business health insurance tax credit makes health insurance more affordable for anyone? Tell us about in our discussion forum!
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