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The Health Care Law is Helping Small Businesses

April 18, 2012 at 9:32 AM ET by Jeanne Lambrew
Summary: 
A new online tool lets small businesses research and compare their health insurance options in one place

Small businesses are the engine of the American economy.  Over the past 17 years, they have generated 65 percent of all net jobs and today the 27.5 million small businesses in the U.S. employ about half of all private sector workers. 

The Affordable Care Act is helping fix a health care market that has been broken for small business owners. For too long, many small businesses couldn’t afford to provide coverage for their employees.  And those who did paid more and knew their premiums could skyrocket if one employee got sick. For many business owners, this meant choosing between keeping their employees covered or dropping coverage and running the risk of losing good employees. 

The new health care law is giving business owners new resources and options to cover their employers. The law helps small business owners by providing tax credits to help them afford coverage. These tax credits have already benefited an estimated two million workers who get their insurance from an estimated 360,000 small employers.  This includes businesses like Vahallan Papers in Lincoln, Nebraska. Vahallan Papers has produced custom, hand-made wallpaper for 14 years, and seven years ago, started offering health insurance to attract high quality employees. They were able to get the tax credit in both 2010 and 2011, and used that tax credit to increase the amount they contributed to their employee’s health care costs, saving their employees around $400 a year each.

Other small business owners can use that credit to help pay for the coverage they have today – or they can go to Finder.HealthCare.gov, a new tool that lets them research and compare their health insurance options in one place. In 2014, it will be even easier for small businesses to find affordable, quality coverage options through Affordable Insurance Exchanges, State-based marketplaces where they can see and compare their private health insurance choices and insurers will compete for their business. 

Exchanges will make buying health insurance easy.  Small business owners will be able to offer their employees a range of plans just like big employers do, while still receiving a single bill and writing a single check.  They’ll still be able to choose how much of their employees’ insurance costs they want to cover.  And because small business owners will be joining a much bigger risk pool, they’ll no longer be vulnerable to sharp swings in their rates based on the health of a few employees. 

The Affordable Care Act doesn’t just help existing small businesses with access to affordable health care.  The new law will also make it easier for entrepreneurs to go out on their own by ending discrimination against people with pre-existing conditions, so no one has to stay at a job to keep their health coverage.

Learn more about how the Affordable Care Act is helping small businesses here.