Ahead of the new health care reform law's two year anniversary, Congresswoman Lois Capps (CA-23) highlighted benefits from the law for small businesses in California's 23rd Congressional District. As a result of the Affordable Care Act, 550 small businesses have received tax credits to help maintain or expand health care coverage for their employees.
Health insurance is much more expensive for small businesses than for big companies, and the small business health care tax credit has helped make it more affordable for these small, but vital, companies. Small businesses that were already providing health insurance coverage before the passage of the Affordable Care Act have been able to lower their costs, and those that have wanted to provide coverage for their workers, but previously couldn't afford it, are now able to do so. Making health insurance affordable for small businesses, the engine of our economy, will help ensure the United States can better compete in the 21st century economy," said Capps.
Capps also encouraged more small businesses on the Central Coast to take advantage of the health care tax credit, citing a report from Small Business California that found 77 percent of small businesses did not know about the existence of the health care tax credit created by the Affordable Care Act. More than 13,000 small businesses in the 23rd Congressional District of California may qualify for significant tax credits under the health reform law.
Capps added, "It's clear that we need to do more to ensure that small businesses know that they may be eligible for the small business health care tax credit. Certainly, we'd like to see more small businesses take advantage of this important benefit."
The tax credit is available to small businesses with 25 or fewer employees and an average wage of $50,000 or less that provide health insurance for their employees. Companies with 10 or fewer employees and an average wage of $25,000 or less get the maximum credit--35% of what the employer is paying for employee insurance coverage. The maximum credit rises to 50% in 2014.The tax credit is also available to small non-profits. For non-profits, the tax credit is worth up to 25% of what the employer is paying for employee insurance coverage. The maximum credit for non-profits rises to 35% in 2014.
Additionally, over 95% of small businesses in California--those with 50 or fewer employees--are completely exempt from the requirement to provide their employees with health insurance. Of the firms that are required to provide insurance, over 95% already do.