Health Reform and Small Business
A vast majority of the nation’s small employers — those who have 25 or fewer workers in the Senate health bill or annual payrolls of $500,000 or less in the House version — would likely be exempted from the mandate.
An analysis by Jonathan Gruber, a respected health economist at the Massachusetts Institute of Technology, concluded that those small businesses that are not exempt would see little impact on employment or profits, although employers would reduce wages to compensate for providing added benefits. The nonpartisan Congressional Budget Office, the chief arbiter of the impact of legislation, has come to similar conclusions.
What’s been most lost in the furor is how much most small businesses would benefit from provisions that should make insurance more affordable — for businesses that already provide coverage and for those that have been deterred from providing coverage by cost.
Small businesses that currently offer coverage often pay significantly more per worker than larger employers do for the same coverage. Under all of the current bills, the smallest employers would gain quick access to new insurance exchanges — where plans would compete for their business with rates comparable to those enjoyed by large employers. (In subsequent years, slightly bigger firms and possibly even medium-size firms would likely gain access to the exchanges as well.)
And many small businesses with low-wage workers would be eligible for substantial tax credits to subsidize their coverage.
