Small Business Owners and Employees Stand to Benefit from Health Reform

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<p>Small-business owners and employees are among those who stand to benefit the most from provisions in some of the current health reform proposals under consideration by Congress, according to a new <a href="/publications/issue-briefs/2009/sep/out-options-why-so-many-workers-small-businesses-lack-affordable">Commonwealth Fund analysis</a>. Currently, 39 million Americans work for companies with fewer than 50 employees, and only 25 percent of them have health insurance through their employer. </p>
<p>While some workers buy coverage on their own or obtain coverage through a family member, 52 percent of people working for small businesses are uninsured or underinsured, compared with 28 percent working for larger firms, the new study finds. The gap in employer coverage between large- and small-firm employees widened over 2003 and 2007. </p>
<p>Provisions in congressional bills would extend health care coverage to everyone and help repair the small-group insurance market, potentially alleviating high premium costs, high broker fees, underwriting, and a lack of transparency about benefit packages that small-business owners currently face. </p>
<p>"Small businesses are vital to the strength of our economy, and under our current system they don't have the ability to provide affordable, comprehensive health insurance to their employees," said Commonwealth Fund President Karen Davis. </p>
<p>The authors of the study found that several features of the reform proposals would improve the ability of small businesses to provide coverage and help their employees afford it. These include:</p>
<li>the ability to purchase health insurance through a new health insurance exchange, which would eliminate underwriting on the basis of health, guarantee a standard benefit package, eliminate lifetime maximums, and help control premium costs;  </li>
<li>an exemption from a requirement to offer health insurance to employees or pay into a fund to finance coverage, which would protect very small businesses;  </li>
<li>tax credits to help small businesses offset premium costs; and </li>
<li>premium subsidies for purchasing coverage through the insurance exchange, and higher income-eligibility limits for Medicaid to help low-wage workers without access to health benefits through their jobs.</li>