Saturday, March 24 , 2018, 2:49 pm | A Few Clouds 64º


Report Shows Broad Eligibility of Health-Care Tax Credits for Local Small Businesses

Coverage is available to nearly 80 percent of all California businesses with 25 or fewer employees

Rep. Lois Capps, D-Santa Barbara, highlighted a new report Thursday showing that 456,500 California small businesses with fewer than 25 employees will be eligible for tax credits this year to help pay for health insurance coverage for their employees.

These new tax credits are part of the new health insurance reform law enacted earlier this year. The report Capps cited was jointly issued by the nonprofit, nonpartisan health care organization Families USA and the Small Business Majority, a small-business advocacy group. The report found that nearly 80 percent of all California small businesses with 25 or fewer employees are eligible for the tax credits.

Currently, most small businesses do not have the same access to affordable group rates that are available to large businesses, making it more difficult for them to provide their employees with health insurance. Nationally, only 46 percent of businesses that employed three to nine workers offered health coverage to its employees last year. Seventy-two percent of businesses with 10 to 24 employees offered coverage. On the other hand, nearly all businesses in California (95.4 percent) with more than 50 employees provided health insurance coverage.

“Over 450,000 small businesses in California are now eligible for the new health insurance tax credit. Businesses that already provide coverage will now be able to lower their costs. And the credits will help business owners who have wanted to provide coverage for their employees, but previously couldn’t afford it,” Capps said. “Making health insurance affordable for small businesses — the engine of our economy — will ensure the United States is able to compete in the 21st century economy. I encourage my constituents to go to my Web site to learn more about the tax credits.”

The report, “A Helping Hand for Small Business: Health Insurance Tax Credits,” also highlights the fact that 135,900 small businesses in California meet the requirements to receive the maximum tax credit of 35 percent. These businesses employ 10 or fewer workers who earn average wages of $25,000 or less.

“Many small businesses — like the local diner, the hardware store down the street or the neighborhood repair shop — face special challenges in providing health coverage for their small number of employees,” said Ron Pollack, executive director of Families USA. “They will now receive substantial help.

“For example, 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. It’s no surprise, therefore, that less than half of these smallest businesses offered health coverage to their employees. This new tax credit should certainly help to improve that record.”

“There’s been a lot of speculation about how many small businesses will qualify for tax credits, and this report clears up a lot of those questions,” said John Arensmeyer, founder and CEO of Small Business Majority. “We now have real numbers that show the vast majority of small businesses in California will qualify for tax credits under the new law. That’s huge.”

The tax credits are just one of the many ways that health insurance reform helps small businesses. On July 1, the new consumer Web portal went live. It will empower small businesses with more information on health coverage options and help small businesses on the Central and South Coast easily identify affordable and comprehensive health-care coverage options available in their ZIP code. Additional features, including the ability to compare plan pricing information and benefit packages, will be added by October.

When the new state-based Health Exchanges are up and running in 2014, small businesses will have the same access to affordable group rates that large companies have today and will be able to choose from a wider selection of private plans.

— Ashley Schapitl is the press secretary for Rep. Lois Capps, D-Santa Barbara.

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click here to get started >

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >