Saturday, September 18, 2010

Excellent Health Care Savings Advice | For Small Businesses | In NYT

Walecia Konrad, writing for The New York Times this morning -- in the "Patient Money" column, has done a masterful job of putting into plain English how the health care reform package has, in part, "leveled the cost playing field" -- or reduced the health care insurance cost disadvantage small businesses face, when comapred to large businesses (which, by dint of larger numbers of covered lives, may purchase health insurance at lower cost, on a per-life basis). Do go read it all.

The example of the bookstore business in Salt Lake City is particularly compelling -- do go read the much longer article -- if you own, or work for, a small business (as 85 percent of Americans do). Here is a teaser:

. . . .Just over one-third of Americans work for small businesses with fewer than 100 employees. If you’re one of those workers, you know that very few small companies offer comprehensive health insurance — or for that matter, any health insurance at all. Even when they do, premiums can be prohibitively expensive, because small businesses can’t negotiate the discounts given to large group plans.

To help close that gap, the government this year is offering a tax credit to companies with fewer than 25 full-time workers and average wages of less than $50,000 a year. To qualify, employers must pay at least 50 percent of their employees’ health care premiums.

Small businesses with 10 full-time employees or fewer earning an average of $25,000 or less are eligible for the largest credit, 35 percent of their health insurance premium costs. Companies with larger numbers of employees earning more receive smaller credits on a sliding scale. . . .

If you’re an employee at a small company, you could learn the details yourself and make sure your employer is ready to take advantage of the coming changes. Entrepreneurs are busy and not always plugged into these kinds of administrative changes. Your input may mean the difference between getting insurance or going without. . . .

Indeed. The Times has even linked an IRS worksheet -- to help small businesses figure out if they qualify for the subsidy. Only one additional page is required in your April 2011 IRS filing -- in order to receive the full-credit for the federal tax year 2010.

More on this is also available at the web portal, as mentioned in this Weekly Address:

And here is the YouTube explainer:

Knowledge is power. And today, the truth -- about the Plan -- is the power. It is not those Fox-driven (Warning: false statement content, at that link!) mangled, tortured rule shadings -- of the Tea Party, and most Republicans -- in this election cycle. Pass it on.


Anonymous said...

Great idea!! Give tax incentives to keep salaries low. Way to help the little guy.

Condor said...

I take it you mean as opposed to returning the tax break to the richest 1/10th of one percent -- a break President Obama is ending.

In any event, arguing that the health care package will keep salaries low is -- at best -- a selective reading. Afterall, with health care, the effective salary is actually increased (for at least 50 million Americans without health benefits, at present).

So -- it boils down to this will cost some group something -- in order to secure our future. Would you rather that the wealthiest carry their share, or not? If not, vote with the Republicans -- that is the center plank of their entire platform, this time around.

Namaste, and thanks for your observations!

Do stop back.

Anonymous said...

Don't get me wrong, I think there are good things in this law that Fox News is not mentioning, but I think this particular part misses the mark. Why is it tied to salary at all?

If you have 10 employees earning an average of $25K or less you get a 35% tax credit. If you give them a raise or hire more people, your tax credit goes down.

Seems like they're incenting the wrong behavior. If I can think of that, why can't the New York Times? That's all I'm saying.

Condor said...

I do hear you, but I certainly think that small companies with much-higher-per-employee average salaries ought to be able to fund their own health plans, with only a graduated tax subsidy.

If your particular business has only 11 employees, but all are making $100,000 or more (like many a small architectural, accounting, or law firm), it is not clear in my mind that taxpayers should subsidize health care, there.

The measure we are talking about should help lower-skill, lower income positions at small companies remain eligible for some form of affordable health care coverage. Just as the NYT example suggested -- think of a "mom & pop" independent bookstore here.

So, I think it is actually wise policy. In both of our minds, I think, the number of employees ought to be indexed to average earnings -- to be eligible for a sliding-scale tax subsidy -- so I don't think we are arguing about WHETHER a line should be drawn -- only about WHERE it gets drawn, right?

Thanks for the additional input, here.


Condor said...

Congrats -- this discussion just became "top o' the blog" -- this morning!

I'll highlight your replies at the same post, should you have any, in the same fashion -- to be fair to our discussion.