Health insurance costs under the Affordable Care Act will fall for small businesses, according to a new report.
Analysis by the Urban Institute found that if all the provisions of the health care law were implemented this year, health insurance spending for all small business (defined as having fewer than 100 employees) would fall by 1.4 percent. Very small businesses?those with fewer than 50 employees?would see a cost-per-person decrease of 7.3 percent.
Critics Are Skeptical
But Kevin Kuhlman, manager of legislative affairs for the conservative-leaning National Federation of Independent Business, told Kaiser Health News the report ?may overestimate the benefits of the law and underestimate the cost impacts of benefits on businesses.?
He pointed to figures showing that fewer small businesses than expected claimed the law?s tax credits, which were designed to ease the cost burden of the law to small firms. A May studyfrom the Government Accountability Office found just 4 to 12 percent of small businesses eligible for the health insurance tax credit used it. (The credit is available to companies that have 25 or fewer workers, pay average salaries of $50,000 or less and cover at least half of employee health insurance premiums. One huge limiting factor in the use of the credit was that very small employers?83 percent, according to one estimate cited in the report?don?t offer health insurance.)
Cost Increase for Mid- To Large-Sized Businesses
The Urban Institute report found that the healthcare law would be bad news for ?mid-sized businesses??those with 100 to 1,000 employees?who would see a 4.6 percent increase in costs. Large businesses?those with more than 1,000 employees?could see their costs rise by 4.3 percent, thanks mostly to higher employee enrollment rates.
If the healthcare law had been in effect in 2012, the report said, employer-sponsored coverage would have increased by 2.7 percent and overall employer spending by 2.2 percent. The largest relative increase in coverage, 6.3 percent, would have occurred among workers in companies with 100 or fewer employees.
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Source: http://www.openforum.com/articles/report-healthcare-costs-will-drop-for-small-business
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