Small Businesses and the Affordable Care Act

Did you know that the majority of businesses in this country are small businesses? Almost 80% of businesses in the U.S. employ fewer than ten workers. As the owner of a small business, you know how much work goes into starting a business and getting it to make a profit. There's often not much margin left over to pay for the benefits that employees are looking for. That's a real challenge, because small businesses don't have the bargaining power of large businesses in shopping for insurance. Less than half of businesses in this country with fewer than ten employees offer health insurance. Only fifteen percent of companies with 25 to 100 workers do. Many small business owners would like to offer health coverage if it were more affordable. The Affordable Care Act gives small business owners some immediate help in providing health coverage by giving businesses tax credits of up to 35% of the amount they pay in insurance premiums. That's right, tax relief right now to pay for health insurance for your employees. Here's how it works. Businesses are eligible if they employ fewer than 25 full-time equivalent workers, and those workers are paid an average annual salary of $50,000 or less. Credits are calculated based on the number of workers and their average wage. There's more good news: this tax credit goes up to 50% of premiums in 2014. As more of the new law is implemented over the course of the next few years, other new options will open up for small businesses. Starting next year, 2011, government grants will be available for up to five years to eligible employers to establish wellness programs for employees. And small businesses will be able to offer cafeteria plans, so workers can put pre-tax earnings into accounts for medical expenses. Looking ahead to 2014, small businesses will be able to buy insurance through competitive exchanges, giving them the purchasing power of a larger group. They'll have a wider choice of affordable plans, the same choices as member of Congress have. Plans that compete in the Exchanges will provide your employees the new benefits and protections available to those who work for large companies. If you can't afford to offer health insurance to your employees, starting in 2014, they'll be able to purchase their own health coverage in the Exchanges, and they may qualify for tax credits to help them afford it.

If you already have health coverage for your employees and you're happy with the plan, you don't need to make any changes. The Act still benefits you. You may qualify for the new tax credits, and you and your workers will have the security of knowing that their health coverage can't be cancelled because of an illness or accident. As of September, 2010, there will be no lifetime limits on the amount an insurer will pay, and annual limits will be restricted for employer plans. The Affordable Care Act was designed to help people like you - small business owners - and put you back in control of your own health care. It will help expand health care coverage for your employees, lower your costs, and improve the quality of the care that you and your employees receive. Find the information you need to make smart health coverage choices for yourself, your employees, and your business or non-profit on this website.

NOTE: The transcript for this program may have been compiled from uncorrected Closed Captioning.