Tax credits could lower costs for nearly 30,000 Nevada small businesses
March 21, 2011
Washington, D.C.–In anticipation of the one-year anniversary of the final passage of health insurance reform this Wednesday, Nevada Senator Harry Reid hosted a press conference today at Pioneer Overhead Door with its owner, Ron Nelsen, Small Business Majority CEO John Arensmeyer, Health and Human Services (HHS) Regional Director Herb K. Schultz highlighting how the new law is currently lowering costs for small businesses across Nevada.
The health care reform law includes more than $40 billion in tax credits to enable small businesses to retain and hire more workers by helping to provide employees with access to affordable health care coverage. An estimated nearly 4 million small businesses nationwide will qualify for these tax credits. According to a recent report by Small Business Majority, it’s estimated that 29,600 Nevada small businesses with less than 25 employees will be eligible for some form of the tax credit.
“Rising health insurance costs were crushing Nevada’s small businesses and undermining their ability to compete in the global economy,” said Reid. “The health insurance reform law provides relief for 30,000 Nevada small businesses and gives them the breathing room to create jobs and grow. As our economy continues to recover, we must make Nevada’s small businesses our top priority by lowering their costs. The health insurance reform law is a major step toward achieving that goal.”
Currently, qualifying small businesses will be eligible for a tax credit worth up to 35 percent of their contribution to premium costs. In 2014, this tax credit is increased to 50 percent for small business that purchase health care coverage through the Exchanges.
Before Reid led passage of health insurance reform, Ron Nelson – owner of Pioneer Overhead Door -- struggled to pay for health insurance for his five full-time employees. However, now he receives more than $2,200 in tax credits as a result of health care reform.
“The tax credits helps. It’s a wonderful thing,” said Nelsen. “It keeps me in the game where I’m not even thinking about shutting insurance off and saying ‘guys you’re on your own.’”
“While some are taking advantage of the tax credits, there’s still a lot of confusion about this law, especially within the small business community,” said Arensmeyer, founder and CEO of Small Business Majority. “We've found that many small employers aren't even aware of provisions in the law that will put money back in their pockets this year. Small business owners are still struggling to keep their doors open. It's important they know how this law will help them now."
“Employers know the value of providing health insurance to their employees, but that can be a real challenge for small businesses -- over the past decade, average premiums for workers at small firms increased by 123 percent while small firms offering coverage fell from 65 to 59 percent,” said U.S. Health and Human Services Regional Director Herb K. Schultz. “Thanks to the Affordable Care Act, small businesses can now receive tax credits to help offset employees’ health insurance premiums. Early signs show that after years of decline, the number of small businesses offering coverage to their employees is actually rising.”
HOW DOES HEALTH INSURANCE REFORM REDUCE COSTS FOR SMALL BUSINESSES IN NEVADA?
In Nevada, just 38 percent of small business owners with less than 50 employees reported paying for health insurance for their employees and many of those are really struggling to do so.
In Nevada, small businesses and the self-employed spent $972 million on health care premiums in 2008. According to projections by MIT professor Jonathan Gruber, that number will rise to $2.3 billion by 2018 without relief from health care reform.
According to a recent report by Small Business Majority, in Nevada it’s estimated that 29,600 small businesses with less than 25 employees will be eligible for some form of the tax credit.