Governor Rendell: Pennsylvania Small Businesses Benefit from Health Care Reform
Federal Tax Credit Offsets up to 35 Percent of Small Businesses' Health Care Costs
PHILADELPHIA, Sept. 28 /PRNewswire-USNewswire/ -- Governor Edward G. Rendell today joined representatives of several small businesses to highlight the benefits the federal Affordable Care Act provides for those businesses, including a 2010 federal tax credit of up to 35 percent of the employers' contributions to employees' health insurance.
"The Affordable Care Act provides real, bottom-line benefits for the small businesses that are critical to the growth of our economy and communities," Governor Rendell said. "The unfortunate reality is that higher health care costs put small businesses at a real disadvantage when it comes to attracting the best workers and growing their companies. But health care reform is taking immediate steps to reduce health care costs for small businesses and build a system that levels the playing field for all employers."
This year, up to 179,000 small businesses in Pennsylvania that provide health insurance to employees are eligible for the tax credit.
Phoebe Wood, of Framer's Workroom in Jenkintown, Montgomery County, joined Governor Rendell today and said the tax credit – which businesses will claim against 2010 taxes, using a return that the IRS is developing now – will help her small business to provide employee health care benefits.
The federal health care tax credit is generally available to businesses with 25 or fewer full-time employees – or the equivalent in a mix of full- and part-time employees – that pay average annual wages under $50,000. It is also available to small, tax-exempt organizations, for up to 25 percent of contributions.
"This small business tax credit is an important step in a process that will fix the broken U.S. health care system," said Governor Rendell. "The health care reform package passed in March includes a number of measures specifically for small businesses, to reduce costs of health care, improve the quality of plans for employees and provide greater choice in health care plans.
"We're now beginning to lay the groundwork for a Pennsylvania health care exchange that will pool small businesses together in 2014 to achieve the negotiation and buying power that large corporations enjoy today," he added.
The nonpartisan, nonprofit RAND Corporation released a report earlier this month concluding that the number of small companies offering insurance for employees will grow significantly under federal health care reform, and that the Affordable Care Act may result in coverage for as many as 14 million more U.S. workers.
The RAND study found that while only 60 percent of workers at businesses with 50 or fewer employees have an offer of coverage now, that percentage may grow to 86 percent after reform, largely because health care exchanges will provide lower costs and greater choices for small businesses.
Earlier this month, Governor Rendell announced another business benefit provided by the Affordable Care Act, the Early Retiree Reinsurance Program. The program provides $5 billion in assistance to employers – including businesses, schools, unions, non-profits and state and local governments – to help them maintain coverage for people who retire before becoming eligible for Medicare.
Pennsylvania government is among the 103 Pennsylvania employers and 2,000 employers nationally that were recently accepted into the Early Retiree Reinsurance Program, and the commonwealth will save $119 million over the next three years in defrayed health care costs for retirees, their spouses and dependents.
"Clearly, federal health care reform is providing real, immediate benefits to our business community, and more relief is yet to come," Governor Rendell said.
More information concerning "Health Care Reform & You" can be found online at www.insurance.pa.gov.
Media contacts:
Gary Tuma, Governor's Office; 717-783-1116
Elizabeth Brassell, Department of Revenue; 717-787-6960
SOURCE Pennsylvania Office of the Governor
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