Helping More Than 4 Million Small Businesses
Small businesses have felt the brunt of the broken health care system and during the economic crisis, many small businesses operate close to the margin, making health care coverage even harder. On average, small businesses pay up to 18% more than large firms for the same health insurance policy and only 45% of America's small businesses can afford to offer health benefits–which means the majority of uninsured Americans are small business owners, employees, and their families. In fact, in 2008, 38% of small companies offered health coverage, compared with 41% in 2007 and 61% in 1993.
Health insurance reform signed into law last month puts American families and small business owners–not the insurance companies–in control of their own health care. One of the many provisions that help small businesses are tax credits to help offer employee health insurance coverage–if they choose to do so. More than 60% of small employers, or more than 4 million firms, are eligible for these credits and they can start taking advantage of them right now.
This week, the IRS has started mailing out postcards to ensure small businesses are aware that if they provide coverage for their workers, they can receive immediate help with their premium costs (and firms that initiate coverage this year will get a tax cut as well):
The tax credit is available to small businesses with 25 or fewer employees and an average wage of $50,000 or less that provide health insurance for their employees. Companies with 10 or fewer employees and an average wage of $25,000 or less get the maximum credit–35% of what the employer is paying for employee insurance coverage. The maximum credit rises to 50% in 2014.
The tax credit is also available to small non-profits. For non-profits, the tax credit is worth up to 25% of what the employer is paying for employee insurance coverage. The maximum credit for non-profits rises to 35% in 2014.
Small businesses in Leader Boehner’s (who has called repealing the health care bill with these tax credits for small businesses the GOP's ‘number one priority’) home state of Ohio will be receiving 147,029 postcards–see how many small businesses are getting postcards in your state»