Small businesses are the driving force of our economy, and we must know how new healthcare legislation will affect us as individual business owners, small business employees and the small business itself. The recent healthcare bill can also be a positive tool for the economy as it can inspire entrepreneurism. The following are some drafted legislation points from The Economic Effects of Health Care Reform on Small Businesses and Their Employees Report (July 2009):
- Small businesses that meet certain criteria would be able to purchase health insurance through an “insurance exchange” – allowing them to choose among a multitude of plans that would provide better coverage at lower costs than they could find in the current small group market.
- Many small businesses that provide health insurance for their employees would receive a small business tax credit to alleviate their disproportionately higher costs and encourage coverage. The tax credit would be targeted to those firms with employees whose average wages fall below a certain threshold.
- The current reform options include financial incentives for medium- and large-sized firms to provide health insurance coverage through so-called “pay-or-play” provisions. Firms with payrolls or employment levels below a certain threshold, which would include the vast majority of small businesses, would be exempt from the pay-or-play provisions.
- The creation of an insurance exchange would also provide better and lower-cost options for workers in small businesses that do not offer health insurance. Low-income individuals and families would receive sliding scale subsidies to help them purchase insurance. Additionally, health insurers would not be allowed to screen potential enrollees for pre-existing conditions.
Although there are wrinkles yet to be ironed out, health care reform and support for small businesses is a step in the right direction. There are many talented employees with the entrepreneurial spirit that feel stuck in a job because they fear they may not be able to afford insurance coverage or they could not get coverage due to a preexisting condition if they struck out on their own. I look forward to a brighter future for our economy, our small businesses and their employees.
Maria Lopez is Director of Latina Business Programs at the Women’s Business Development Center (WBDC).