Small businesses in the United States will benefit greatly from the health care reform. According to The White House, 65 percent of all net jobs in the United States come from the 27.5 million small businesses around the country. With more than half of private sector workers employed by small businesses, creating reasonable health care options for these individuals is a primary goal of the Affordable Care Act (ACA).
Under the new health care law, small businesses have been granted a 35 percent tax credit to assist with the cost of employee health insurance. In 2010 and 2011, more than 300,000 businesses were able to take advantage of the program, benefitting approximately 2 million workers in the nation.
Prior to the Affordable Care Act, only 49 percent of small businesses with 10 employees or fewer offered any form of health coverage. That was a significant drop from 1998. USA Today reported that back then, small businesses offered 58 percent more health coverage for employees, but that the rising cost of health care led many of them to drop coverage altogether.
In the coming years, small businesses will be able to provide a range of insurance options for employees through the use of the Affordable Insurance Exchange system. This system will allow employers to view a state database with information on health insurance companies. These companies will create a larger risk pool, allowing small businesses to lower the cost of carrying coverage for employees and eliminate rate spikes.
Under the Exchange, employers will be allowed to determine how much of the health care costs they wish to cover and which plans they wish to offer.
Finding a plan isn’t the only hurdle for a small business looking to provide health care. Before the ACA, employers had difficulty managing fluctuations in insurance costs due to reported cases. One single claim on the company’s health account could mean a drastic increase in premiums. Starting in 2014, under the ACA, a community rating rule will prevent insurance companies from changing rates because of claims or pre-existing conditions.
The ACA will also promote the start of small businesses by providing more accessible, inexpensive health care, which will prevent people from staying in large firms simply for the benefits. Under the plan, new business owners will be allowed access to the same affordable plans than established facilities.