Most small businesses in TN can get help for health plans

Nearly 90 percent of small businesses in the state are eligible for a premium tax credit that takes effect this year as part of health-care reform, according to a group that promotes wider access to health coverage.
"This is the very first time I've ever seen a legislative program that actually puts money in my pocket," said Murray Hudson, the owner of an antique map store in Halls, Tenn. "That's not a big enough incentive to add jobs in this economy, but it helps."

In Tennessee, 66,500 small businesses will qualify — including 21,600 eligible for the maximum tax credit of 35 percent this year, according to consumer advocate Families USA and the business advocate Small Business Majority.

"I see a glimmer of hope down the road when the state exchanges allow small businesses to band together to get better insurance prices," Hudson said.

Families USA and the Small Business Majority each see the credits, which vary based on a company's size and average wages, as a big help to business owners who struggle with the costs of offering insurance coverage to their workers.

"This can tip the scale for those who recently got out of the business of providing coverage to their workers to get back in," said Kathleen Stoll, deputy executive director of Families USA.

Small-business owners, employees and their families account for half of the uninsured population in the U.S., Stoll said. Nationwide, the report estimates that more than 83 percent of businesses with 25 or fewer employees could qualify for tax credits. "This is a very targeted way to say that we've got to address this now," said John Arensmeyer, head of the Small Business Majority.

Costs are still a concern

One local critic of health-care reform, however, says the report overstates how many small businesses can benefit. "Some businesses will certainly get a tax credit, but overall this bill is going to increase health insurance costs, increase taxes and increase paperwork on small-business owners," said Bill Rys, tax counsel with the National Federation of Independent Business, another small-business lobbying group.

"Any benefit you get from the tax credit is outweighed by all these increased costs of doing business," Rys said.

Getahn Ward covers the business of health care for The Tennessean . He can be reached at 615-726-5968 or at gward@tennessean.com.

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