Small Businesses Owners Also Affected by the Affordable Care Act
No matter which side of the issue you’re on, there’s no denying that small businesses will be impacted by the Affordable Care Act. But another question looming is how the PPACA will impact the owners of those small businesses.
The Kasier Family Foundation recently addressed this very topic. According to its Employer Health Benefits Survey, small businesses are much less likely than larger businesses to offer health benefits to their workers. Half of businesses with 3-9 workers and 73% of firms with 10-24 workers provide health insurance. That contrasts with 98% of firms with 200 or more workers that offer health coverage.
The workers in these firms that do not offer coverage must rely on employer-based insurance through a family member, buying insurance in the individual market (assuming they can afford the coverage and do not have a pre-existing health condition), or in many cases going uninsured.
As for the owners of these small buinesses, KFF says about 25% of them are uninsured. Just 40% of small business owners get job-based insurance, either from their own job or through a family member. In contrast, almost six in ten non-elderly adults get their insurance through an employer.
The survey found about 30% of small business owners rely on the individual insurance market.
According to KFF, this suggests that the biggest effects the ACA will have on small business owners may not be changes in the rules for the small business insurance market, but rather the changes in the individual insurance market: guaranteed access to coverage and no premium surcharges for people with pre-existing health conditions, limits on how much premiums can vary by age, a requirement that all insurers cover a set of “essential” benefits, the creation of health insurance exchanges, the requirement to be insured, and tax credits to make premiums more affordable. In fact, an estimated 60% of small business owners now buying insurance in the individual market have incomes up to 400% of the poverty level and would be eligible for tax credits in exchanges or Medicaid, and 83% of owners who are now uninsured would be eligible for subsidized coverage (split about equally between tax credits and Medicaid).