In March 2010 the Patient Protection and Affordable Care Act was signed into law. This sweeping healthcare reform legislation addresses serious problems small business owners face, including skyrocketing healthcare costs, lack of access to affordable coverage and little choice among health plans.
The new law will be implemented over a five-year period (2010-2014) to avoid disruption to the existing system and make the transition as smooth as possible. It will build upon the existing employer-based system, but reform it in a manner that reins in costs for small businesses.
Small Business Majority’s written testimony for the House Ways and Means Committee’s “Hearing on the Health Care Law’s Impact on Jobs, Employers and the Economy” on Jan. 26, 2011, gives the small business perspective on the Patient Protection and Affordable Care Act and its impact on America’s 28 million small businesses and the economy as a whole.
Our testimony and supporting research shows that reforming our broken healthcare system has been and still is one of small business owners’ top concerns, and that the majority of small employers believe reform is needed to fix the U.S. economy. It also shows that small businesses support key provisions in the law, specifically ones that help them better afford insurance, such as tax credits and insurance exchanges, and those that contain costs. Our research also shows that absent reform, these costs would continue to escalate, undermining small businesses’ success and our economic recovery.
|Summary of Written Testimony for House Ways and Means Committee Hearing
||January 26, 2011 - Small Business Majority|
|Statement for the Record Before House Ways and Means Committee
||January 26, 2011 - Small Business Majority|
Health insurance exchanges are the most important component of healthcare reform for small businesses. These marketplaces will allow small businesses and individuals to band together to purchase insurance, which will lower their healthcare costs and allow more of them and their employees to get quality healthcare coverage.
On February 6, 2012, Small Business Majority released "Making California's new healthcare exchange work for small businesses," a report detailing our three-part SHOP forum series in Sacramento. Health insurance exchanges—and the Small Business Health Options Program (SHOP) in particular—are the most important element of healthcare reform for small businesses.
Successes and failures of past state exchange models have shown that it takes time and consideration to build them well. To help facilitate the SHOP design process, we hosted discussion forums in Sacramento during October, November and January. At each forum, a panel of experts spoke to business advocates, government staff, brokers and other stakeholders about major aspects to consider when setting up an exchange that can work for California small businesses. The three topics discussed were: providing insurance at an appealing rate, providing valuable services to small businesses and constructing a successful marketing and outreach strategy. Our subsequent recommendations on how to create a robust exchange can be found in the report.
|Making California’s new healthcare exchange work for small businesses
||February 6, 2012 - Small Business Majority|
On August 3, 2010, HHS released a request for comments to solicit public input regarding the exchange-related provisions of the Patient Protection and Affordable Care Act), enacted on March 23, 2010. Small Business Majority joined with other advocacy groups to submit the following comments:
|HHS exchange comments:
|Joint comments on state-level exchanges by California organizations, October 4, 2010|
|HHS exchange comments:
|Joint comments on state-level exchanges by national organizations, October 1, 2010|
A report from the United Hospital Fund examines the design options New York policymakers face when deciding how to move forward on the state's health insurance exchange.
|Building the Infrastructure for a New York Health Benefit Exchange: Key Decisions for State Policymakers
||January 4, 2011 - United Hospital Fund|
On July 6, 2011, Small Business Majority and the Center for American Progress released a report, "SHOPping Around: Setting up State Health Care Exchanges for Small Businesses: A Roadmap," that provides recommendations to state policymakers on how best to move forward with implementation of health insurance marketplaces for small businesses. The report provides a roadmap lawmakers can follow when setting up state health insurance exchanges, which are required to be up and running by Jan. 1, 2014. The report focuses on the intricacies of creating an exchange, provides examples of successes and failures experienced by states that have already created them and offers advice on how to get it right the first time.
|SHOPping Around: Setting up State Health Care Exchanges for Small Businesses: A Roadmap
||July 6, 2011 - Small Business Majority and the Center for American Progress|
Small businesses have a difficult time affording health insurance because costs continue to spiral out of control. Premiums for employer-sponsored health coverage have more than doubled over the last decade and would have only become more expensive if Congress didn’t take action to address this problem by passing healthcare reform legislation in March, 2010.
The Patient Protection and Affordable Care Act includes many provisions to contain costs. These measures will be felt throughout the entire healthcare system, lowering premium costs to small business owners and consumers alike.
The following provisions are some of the main cost containment measures enacted by the legislation:
|Cost Containment Measures Under Healthcare Reform
||Small Business Majority|
Healthcare reform also saves small business owners money immediately through tax credits. Small businesses that pay at least 50% of their employees’ health insurance premiums and have less than 25 full-time workers with average annual wages below $50,000 are eligible for tax credits up of to 35% of their healthcare costs. This provision is designed to give small employers some financial relief from high healthcare costs, and more than four million small businesses nationwide qualified for this credit in 2010.
Additionally, the law enables small businesses to keep their current plan if they like them, as long as they don’t make any significant changes in coverage. If any major plan are made, the plan can no longer keep its grandfathered status—which means that all the new consumer protections introduced with reform will apply.
Most small businesses are exempt from this requirement. Employers with fewer than 50 FTEs are not subject to the shared responsibility provision that takes effect January 1, 2014. If you have at least 50 FTEs but no employee receives an individual premium tax credit or cost-sharing reductions (both based on income), there’s no penalty—whether or not you offer health insurance.
If you have at least one full-time employee who receives a premium tax credit or cost-sharing reductions under the health plan they’re enrolled in through the state insurance exchange, the payment assessed depends on whether or not you offer health coverage.
If the employer does not offer coverage, and at least one full-time employee receives a premium tax credit or cost-sharing reductions, the business must pay $2,000 for each full-time employee, not counting the first 30 employees.
If the employer does offer coverage, and at least one full-time employee receives a premium tax credit or cost-sharing reductions, the employer will be required to pay $3,000 for each employee who receives assistance or $2,000 per full-time employee (not counting the first 30 employees), whichever is less.
These are just some of the many components of the Affordable Care Act that address small business owners’ No. 1 concern: rising healthcare costs. The law includes a variety of other measures that will indirectly cut down on expensive premium costs and help expand access to quality, affordable health insurance for small businesses and the millions they employ.