Re­port: Most small busi­nesses qual­ify for health cov­er­age aid

Austin American-Statesman - - METRO & STATE - By Mary Ann Roser

About 81 per­cent of Texas small busi­nesses, or 248,700 of 4 mil­lion U.S. com­pa­nies, are el­i­gi­ble for a fed­eral tax credit this year to help them buy health in­surance for their work­ers un­der the new health care law, ac­cord­ing to a re­port re­leased Thurs­day.

The pro­vi­sion tar­gets com­pa­nies with 25 or fewer work­ers who earn an av­er­age of less than $50,000 a year, said the re­port by Fam­i­lies USA, a na­tional con­sumers group, and the Small Busi­ness Ma­jor­ity, an ad­vo­cacy and re­search or­ga­ni­za­tion.

Tax credit amounts will vary based on the com­pany’s size, but those with 10 or fewer work­ers who earn an av­er­age of less than

$25,000 a year are el­i­gi­ble for the max­i­mum ben­e­fit — 35 per­cent off the cost of a small group plan. In Texas, 79,100 small busi­nesses would qual­ify for the max­i­mum this year, said the re­port, “A Help­ing Hand for Small Busi­nesses: Health In­surance Tax Cred­its.”

The max­i­mum credit for non­profit em­ploy­ers is 25 per­cent.

“I think the tax credit is a great, great, great thing,” said Judy Fazzio, co-owner of 2 Chicks Groom­ing, a Cedar Park pet groom­ing busi­ness. “I don’t know how it could not be an en­tice­ment and a ben­e­fit for other small busi­nesses.”

The tax credit is aimed at com­pa­nies that have the hard­est time af­ford­ing health in­surance, said Kath­leen Stoll, deputy ex­ec­u­tive di­rec­tor of Fam­i­lies USA.

“It’s re­ally (for) the small guy who is in the most need of help,” she said dur­ing a con­fer­ence call with jour­nal­ists Thurs­day.

The re­port said that, in 2008, busi­nesses with fewer than 10 work­ers paid $350 more on av­er­age for each em­ployee they cov­ered than firms with 50 or more work­ers. And the smaller com­pa­nies gen­er­ally got less cov­er­age for their money.

Na­tion­ally, 72 per­cent of busi­nesses with 10 to 25 work­ers of­fer health cov­er­age, the re­port said, ver­sus 95 per­cent of busi­nesses with 50 or more work­ers. Less than 46 per­cent of com­pa­nies with 10 or fewer work­ers of­fered it, the re­port said. More than half of Amer­ica’s unin­sured peo­ple are small-busi­ness own­ers, their em­ploy­ees and fam­ily mem­bers, Stoll said.

The data show “there’s a cri­sis in small busi­nesses of­fer­ing in­surance,” said John Arens­meyer, founder and CEO of the Small Busi­ness Ma­jor­ity. The pro­gram is “not a panacea,” Arens­meyer said, but “there is no down­side.”

The or­ga­ni­za­tions com­mis­sioned the Lewin Group to an­a­lyze data from the U.S. Cen­sus Bureau and U.S. Agency for Health Care Re­search to pro­duce the re­port’s es­ti­mates.

Travis, Hays and Wil­liamson coun­ties have 32,208 small busi­nesses with one to 20 em­ploy­ees, said Jim Ro­driguez, pres­i­dent and CEO of TexHealth Cen­tral Texas, a non­profit that is of­fer­ing low-cost in­surance to small busi­nesses with con­tri­bu­tions from Wil­liamson and Hays county com­mis­sion­ers and Cen­tral Health, for­merly the Travis County Health­care District.

Ro­driguez said the tax credit will make health cov­er­age more af­ford­able to com­pa­nies.

Fazzio’s com­pany is en­rolled in TexHealth, and she and a co-worker are cov­ered by it. Two other work­ers are cov­ered by a spouse’s health plan, and a fifth worker has cho­sen to go unin­sured, Fazzio said. She pays $249 a month for her cov­er­age and matches $74.52 for half of the em­ployee’s monthly share. If she can get the max­i­mum 35 per­cent credit, Fazzio would pay $26.08 less per month for her em­ployee. She is go­ing to check with her ac­coun­tant.

Not ev­ery­one will be able to af­ford it. David Levy, who owns Jake’s Nat­u­ral Fine Foods along with his wife, said he doesn’t have the cash flow to of­fer health cov­er­age at this time.

“I think, right now with the econ­omy be­ing what it is, it’s all we can do as re­ally small busi­nesses to merely sur­vive the down­turn.” Levy wrote in an e-mail. “Health care cov­er­age would have to be con­sid­ered a lux­ury at present.”

The re­port cites other pro­vi­sions in the law that will help busi­nesses buy in­surance, in­clud­ing a web­site start­ing this month list­ing op­tions for small-group cov­er­age, with links start­ing in Oc­to­ber for easy com­par­i­son shop­ping; health care ex­changes in 2014 that will en­able em­ploy­ers to buy in­surance for work­ers in a sim­pli­fied way; and an end to al­low­ing in­sur­ers to charge em­ploy­ers higher rates if work­ers have pre-ex­ist­ing health con­di­tions.

Jar­rad Hen­der­son

Judy Fazzio says a new fed­eral tax credit for health in­surance is ‘a great thing.’ She hopes it will help cover one of the em­ploy­ees at her Cedar Park busi­ness, 2 Chicks Groom­ing.

Jar­rad Hen­der­son

Tammy Leonelli works at 2 Chicks Groom­ing, which could get the max­i­mum 35 per­cent tax credit to help cover health in­surance costs for em­ploy­ees.

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