Thursday, Jul. 30, 2009

If You Are The Owner of a Small Business

62% of firms (3 to 199 workers) offer health benefits

Current Situation: More and more small businesses are dropping coverage for employees or reducing the proportion of insurance premiums they pay. This saves on costs but sometimes means losing workers to big companies, which have larger risk pools and therefore can afford to offer more generous benefits.

How Reform Could Affect You
The upside: If a public plan existed, small businesses could buy into it and be included in a large risk pool, thus driving down the cost of providing coverage to employees. Companies with fewer than 10 or 25 employees, depending on which, if any, congressional proposal becomes law, could be exempted from reform provisions requiring employers to offer health benefits.

The downside: Midsize companies could still be forced to offer health benefits. Small businesses that employ low-wage workers might have to pay a penalty if their workers receive federal subsidies to buy insurance.