New Report Shows 89.2 Percent of Kentucky Small Businesses Eligible for Federal Health Care Tax Credi

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Jul 22nd, 2010

 

Frankfort, Ky.—More than 89.2 percent of Kentucky businesses with up to 25 employees will be eligible this year for federal tax credits to help pay for employee health coverage, according to a report issued today (July 22, 2010) by the consumer health organization Families USA and small business advocacy group Small Business Majority.

 

The tax credit program, a key element of the new federal health reform law, targets small employers. In Kentucky, this means 51,100 small businesses with 25 or fewer employees will qualify. Nationally, more than four million small businesses—83.7 percent—are eligible for the credit in 2010.

 

The report, “A Helping Hand for Small Businesses,” notes that 15,800 Kentucky small businesses will qualify for the maximum tax credit of 35 percent. These are businesses that employ 10 or fewer workers who earn an average wage of less than $25,000 and traditionally have the most difficulty affording insurance.

 

“Many small businesses—like the local diner, the hardware store down the street, or a single physician practice—face special challenges in providing health coverage for their small number of employees,” said Jodi Mitchell, Executive Director of Kentucky Voices for Health. “This tax credit will help level the playing field for small businesses who will now have access to a new tax credit enabling them to hire and keep good workers who want and need health coverage.”

 

Small businesses often cannot afford to provide health coverage for their workers.  In Kentucky, an estimated 39 percent of small businesses offer health coverage while more than 96 percent of businesses with 50 or more workers offer coverage.

 

The new law aims to address this imbalance with tax credits, offering the maximum credit of 35 percent to the smallest companies. Nonprofit employers also benefit, with a maximum credit of 25 percent.  As the number of employees and their average wages rise, the tax credit is reduced on a sliding scale.  To provide further assistance, the law allows employers to count two half-time workers as one full-time worker, meaning that an employer with mainly part-time workers will be able to qualify for the tax credit.

 

The report notes that the health reform law has additional provisions to aid small businesses now and in coming years. Among them:

 

·         Starting this month, small business owners can view all health coverage options available in their state on a user-friendly website.

 

·         Starting in 2014, small employers will be able to purchase quality coverage with strong consumer protections through state-based health coverage marketplaces called “exchanges.”

 

·         Starting in 2014, small employers will be eligible for tax credits up to 50 percent, or 35 percent for nonprofits, to cover their workers with policies obtained through the state exchanges.

 

·         Starting in 2014, insurers will be prohibited from charging small employers higher premiums based on their workers’ pre-existing conditions.

 

The full report on this health insurance tax credit program, “A Helping Hand for Small Businesses,” is available at:  http://www.familiesusa.org/assets/pdfs/health-reform/helping-small-businesses.pdf

 

Kentucky Voices for Health is a broad coalition of more than 50 organizations working to improve Kentuckians’ health and health-care coverage. The coalition’s leadership team is composed of representatives from AARP Kentucky, Advocacy Action Network, American Cancer Society, American Heart Association, American Lung Association, Catholic Conference of Kentucky, Covering Kentucky Kids and Families, Kentucky Council of Churches, Kentucky Equal Justice Center, Kentucky Youth Advocates, and the Kentucky Injury Prevention and Research Center.  Kentucky Voices for Health receives grant funding from the Public Welfare Foundation through the Foundation for a Healthy Kentucky. 

 

KentuckyVoices for Health: Building a healthy Kentucky together.

 

We’re a coalition of concerned Kentuckians who believe that the best health care solutions are found when everyone works together to build them.  Right now, families and businesses in every county are facing rising costs, and too many of us go without needed health care.  Healthy families create healthy economies.  And a healthy Kentucky economy is something we all want.  So we’re working step by step to build a healthier Kentucky for our families, our children and our grandchildren.

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