We hear a lot of talk these days about “job creators.” Yet, America’s greatest source of meaningful job creation – our small businesses – are often left out of the conversation. Main Street is the backbone of our country and our state. As our small businesses help our economy get back on its feet during these tough economic times, our government should be supporting them every way.
March 23rd marks the two-year anniversary of the Affordable Care Act (ACA) being signed into law by President Barack Obama. Studies show that today, small businesses create 70 percent of new jobs. Before the legislation was passed, a study from the Small Business Majority found health care costs were rising so much that it would cost 178,000 jobs by 2018. The ACA lowers health costs for small businesses through tax credits and other cost containment measures. These new reforms mean big savings for small businesses, freeing them to invest in job creation.
During the first half of 2011, one in three Americans lived in a family that struggled to pay medical bills within the previous year, was currently paying a medical bill over time, or was dealing with a medical bill that the family was unable to pay at all. This is clearly not a sustainable way of life.
Most small business owners think of their employees like family and want to offer coverage to help their workers. Over the past two years, small business owners throughout the country have already benefitted from new access to tax credits, which helps lower premiums. This allows them to offer employees comprehensive coverage like never before. Thanks to these reforms, the all-too-familiar binary choice – either to provide health insurance for current workers or hire more workers – is becoming a thing of the past.
One way the Affordable Care Act lowers health costs for small businesses is by allowing them to band together in health exchanges that will be created in each state. By forcing insurance companies to compete, these exchanges will drive down costs, guarantee choice, and put small businesses in control. Just last month, New Jersey was one of eight states awarded a Consumer Oriented and Operated Plans loan. These funds will help the Freelancers CO-OP of New Jersey start a private non-profit, consumer-governed health insurance company. It will be run by their members and is designed to offer coverage and choices to both individuals and small businesses. Before, insurance companies charged small businesses in the individual market an average 18% more in premiums than larger businesses. While the insurance exchanges included in the ACA will bring costs down once they begin in 2014, we should still make it even simpler for small business owners to provide insurance to their employees right now.
One important aspect of President Obama’s proposed budget expands a tax credit to help small businesses provide the care their employees need and deserve. The Small Business Health Care Tax Credit has benefited hundreds of thousands of small businesses since the ACA passed. After listening to business owners throughout the country, President Obama has proposed making the tax credit available to even more businesses. His budget increases the maximum size of eligible companies from 25 employees to 50. It also calls for more generous phase-out provisions and a simplification of the credit – making it far easier to claim. Estimates indicate that if the President’s new plan is enacted, the tax credit will benefit about half a million employers who provide healthcare to 4 million workers in 2012 alone. Over the next decade, it would provide an additional $14 billion in tax credits to small employers all across America, meaning more job creation and sustainability.
While Republicans want to fight the same stale political battles to hand control of health care back to insurance companies, it is crucial that we continue to protect our small businesses. This means giving Main Street a level playing field to compete on. The relentless assault on the Affordable Care Act at the hands of the right-wing in Congress proves that they put the concerns of Big Insurance and their lobbyists ahead of those of the middle-class.
Simply put, these new changes to healthcare will help small business owners hire more employees and forge an American economy that is built to last. The small business health care tax credit and the improvements to the tax credit President Obama is proposing will increase the number of eligible small businesses and make the process of claiming the credit easier. The quicker these plans are implemented, the quicker small business owners across the country can benefit.
For additional information on the tax credit, go to www.whitehouse.gov, www.healthcare.gov and www.irs.gov — which all have special sections to answer questions and help small businesses figure out if they qualify for the credit.
Brendan Gill, chairman of Montclair’s Democratic party, was elected to the Essex County Board of Chosen Freeholders in November.