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Business group disputes health reform estimates

Fewer small businesses will be eligible for tax credits to help pay for health care insurance than some estimates project, according to a small business advocacy group.

“Supporters claim 4 million small businesses are eligible for the temporary credit, but the fact is less than 2 million small businesses will receive it,” said Bill Rys, National Federation of Independent Business (NFIB) tax counsel.

In Colorado, some estimates project that 82,400 small businesses will benefit from the tax credit provisions of the new federal health care reform legislation. But the actual number is 44,853, Rys said.

Rys said the Small Business Majority and Families USA overestimate how many businesses will qualify for the tax credit.

“Of the four required criteria to receive a credit, they only looked at two pieces (firm size, average wage). They leave out whether the business offers insurance and pays for half (both are required to receive a credit),” Rys said. “The truth is, about one third of firms under 25 employees offer insurance. And, the lower the average wage of a firm, the less likely it is to offer insurance.”

Rys said the NFIB Research Foundation based its estimates on tax credits on data from the Department of Health and Human Services, U.S. Small Business Administration and Kaiser Foundation.

“Will a temporary credit help some of the smallest, lowest-wage businesses? Sure,” Rys said. “Is it the ‘saving grace’ it’s being made out to be? Probably not. The minimal benefits of this tax credit are easily outweighed by the new and expensive burdens of this law.”

Tony Gagliardi, state director of the NFIB in Colorado, said the effects of national health care reform don’t take into account the effects of state legislation.

“States, and Colorado is no exception, continually add more and more requirements onto the basic plans health insurers can legally sell, and each one raises the cost of premiums and pushes affordability further and further out of the reach of small business owners,” he said. “Allowing insurers to design low-cost plans tailored to the needs of each, individual business would do more to bring the uninsured into coverage than some elusive tax credit out of Washington, D.C.”

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Posted by on Jul 29 2010. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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