New report: 88 percent of SC small businesses to benefit from tax credits (AUDIO)
More than 88 percent of South Carolina small businesses with fewer than 25 employees will be eligible this year for tax credits to help pay the cost of employee health coverage, according to a new study.
The consumer health organization Families USA and the small business advocacy group called the Small Business Majority say the tax credit program, a key element of the Patient Protection and Affordable Care Act, targets small employers with up to 25 workers.
Small Business Majority founder and CEO John Arnsmeyer says in South Carolina, this means 53,200 small businesses will qualify. They’ll simply pay less in taxes if they help their employees with their insurance. Arnsmeyer says employees benefit in the end.
AUDIO: Arnsmeyer on tax credits (1:57)
The report notes that 15,900 South Carolina small businesses will qualify for the maximum tax credit of 35 percent. Those are businesses that employ 10 or fewer workers who earn an average wage of less than $25,000 and traditionally have the most difficult time affording insurance.
Nationally, more than four million small businesses—83.7 percent—are eligible in 2010 for the credit.
Richland County House Member Anton Gunn, a Democrat and small business advocate, says, “Finally small businesses are getting some help so they can spend less money on health care and invest more in growing their businesses.” He says the Congressional Budget Office estimates the tax credit will save small businesses $40 billion by 2019.
To qualify, a small business must have less than the equivalent of 25 full time workers, pay average annual wages below $50,000, and cover at least half of the cost of health care coverage for their workers.
Starting in 2014, small employers will be able to purchase quality coverage with strong consumer protections through state-based health coverage marketplaces called “exchanges.” Small employers will be eligible for tax credits up to 50 percent, or 35 percent for nonprofits, to cover their workers with policies obtained through the state exchanges.
Also in 2014, insurers will be prohibited from charging small employers higher premiums based on their workers’ pre-existing conditions.
Ron Pollack, Executive Director of Families USA, says in 2008, employers with fewer than 10 workers had to pay on average nearly $350 more for each employee’s health insurance than firms with 50 or more workers. He says it’s no surprise that less than half of those smallest businesses offered coverage to their employees.
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