Washington, D.C.– Rep. Raúl M. Grijalva today highlighted a new study showing that 85.7 percent of Arizona small businesses with fewer than 25 employees will be eligible this year for tax credits to help pay the cost of optionalemployee health coverage. The tax credit program is a key element of the Patient Protection and Affordable Care Act passed earlier this year.
About 72,600 small businesses in Arizona will qualify, according to the report, “A Helping Hand for Small Businesses: Health Insurance Tax Credits.” The report, prepared jointly by the consumer health organization Families USA and small business advocacy group Small Business Majority, also notes that 18,900 Arizona small businesses will qualify for the maximum tax credit of 35 percent. These are businesses that employ 10 or fewer workers who earn an average wage of less than $25,000 – a segment of the work force that traditionally has the most difficult time affording insurance.
Nationally, more than 4 million small businesses – 83.7 percent of the total – are eligible in 2010 for the credit. Qualifying firms must have less than the equivalent of 25 full time workers, pay average annual wages below $50,000, and cover at least 50 percent of the cost of health care coverage for their workers.
While the health care reform law does not require businesses with less than 50 full time employees to offer coverage, Grijalva said, “I sincerely hope that smaller businesses will take advantage of this extraordinary opportunity. Arizona businesses want to stay ahead of the curve in attracting talent and keeping down costs, and this credit is an important tool in that effort.”
The tax credit can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent. The Congressional Budget Office estimates that the tax credit will save small businesses $40 billion by 2019. Both small for-profit businesses and small not-for-profit organizations are eligible.
“Health care is now more affordable for companies and their employees, but only if they take advantage of these opportunities,” Grijalva said. “This is a simple way to help businesses and individuals save money and get coverage, and I encourage everyone to use this credit to their full ability this year.”