Every day, America’s small-business owners overcome incredible challenges to pursue their dreams. But over the years, most have confronted one challenge beyond their control: the rapidly rising price of health coverage. As a result, many businesses have struggled to find health insurance that meets their employees’ needs and fits their budget. As we mark National Small Business Week, it’s worth taking a closer look at how the Affordable Care Act is ushering in better options for America’s 28 million small businesses.
Already, small businesses have benefited from improved accountability and affordability in the health insurance market. Insurers selling to small businesses must now justify any double-digit rate increases and provide rebates if they spend less than 80 percent of premium revenue on health care and quality. Last year, 3.3 million consumers insured through small businesses received average rebates of $174 – and rebates for 2012 are on their way. Even better, the proportion of double-digit rate increases proposed by insurance companies dropped from 75 percent in 2010 to 14 percent at the start of 2013.
And small employers with lower- and moderate-wage employees are also benefitting from a new tax credit worth up to 35 percent of their premium contribution. Next year, the maximum credit rises to 50 percent.
Starting in 2014, small business owners will have a whole new way to shop for insurance thanks to the new Health Insurance Marketplace. The small employer section of the marketplace, known as the Small Business Health Options Program, or SHOP, will give employers with 50 or fewer workers some key advantages that simply don’t exist today.