|Healthcare Tax Credit a Big Question Mark for Iowa|
|News Releases - Business, Economy & Finance|
|Written by Kristin Kunert|
|Thursday, 29 July 2010 13:50|
Healthcare Tax Credit a Big Question Mark for Small Business; the Iowa numbers that supporters toss out just don’t add up
DES MOINES, Iowa, July 28, 2010 – “We’re from Washington and we’re here to help” never had a more hollow ring or was more factually baseless than in the claims made by some health reform supporters in the number of small businesses that would qualify for the new health insurance tax credit passed under the Patient Protection and Affordable Care Act.
“Supporters claim 4 million small businesses are eligible for the temporary credit, but the fact is less than 2 million small businesses will receive it,” said NFIB tax counsel Bill Rys. “This recently-released research shows how many small businesses will be eligible, but it doesn’t take into account whether the firms even offer health insurance.”
The research referred to by Rys was put out by Families USA and the Small Business Majority. But the small business authority, NFIB, paints an entirely different picture. In Iowa, the Small Business Majority/Families USA data claim 51,100 small businesses would benefit from the new tax credit. The NFIB Research Foundation, however, pegs the real number at 17,651, using data from the U.S. Dept. of Health and Human Services, the U.S. Small Business Administration, and the Kaiser Foundation.
“Will a temporary credit help some of the smallest, lowest wage businesses? Sure,” said Rys. “Is it the ‘saving grace’ it’s being made out to be? Probably not. The minimal benefits of this tax credit are easily outweighed by the new and expensive burdens of this law.”
“Of the four required criteria to receive a credit, they [SBM/Families] only looked at two pieces (firm size, average wage). They leave out whether the business offers insurance and pays for half (both are required to receive a credit),” Rys continued. “The truth is about one-third of firms under 25 employees offer insurance. And, the lower the average wage of a firm, the less likely it is to offer insurance.”
None of the talk over the putative benefits and very real drawbacks of the national legislation even takes into account what states have been doing to ensure small businesses can’t insure, reminded NFIB/Iowa State Director Kristin Kunert. “States, and Iowa is no exception, continually add more and more requirements onto the basic plans businesses can buy, and each one raises the cost of premiums and pushes affordability further and further out of the reach of small business owners. Having the option of low-cost plans tailored to the needs of each, individual business would do more to bring the uninsured into coverage than some elusive tax credit out of Washington, D.C.”
[Business owners can see if their enterprises qualify for the healthcare law's new small business tax credit on health insurance, and if they do, how much it is, by going to www.nfib.com/creditcalculator]
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