Report: Small Businesses Would Be Hurt By Health Care Repeal

By: Alex Goldsmith Email
By: Alex Goldsmith Email

A report released Monday by the Public Interest Research Group says that small businesses would be hurt by any health care repeal.

The main reason? Small business tax credits built into the law that can pay back as much as 35% of an employer's health care costs.

Mark Hodesh, owner of Downtown Home & Garden in Ann Arbor, certainly benefitted. His business is going to receive $15,000 in tax credits, or 30% of the business' total health care costs.

Hodesh saw something positive coming in the law before it passed.

"In the spring when I suspected reform was going to pass I knew it would be aimed at my small business," said Hodesh. "What it did was it gave me the confidence to hire another person."

"The law can do nothing but help small businesses," said Meghan Hess with the Public Interest Research Group in Michigan (PIRGIM). "These tax credits are allowing them to grow their business and expand in ways they wouldn't be able to do otherwise."

Qualifying for the full credit isn't the easiest thing to do. A business needs to pay at least 50% of premiums, employ 10 or less people and pay those employees an average of $25,000 or less to get the full 35% tax credit.

Scott Lyon of the Small Business Association of Michigan doesn't see a lot of businesses fitting that profle in his talks with thousands of small business owners since reform was passed.

"There are partial credits," said Lyon. "But the cliff that goes from 0 to 35 percent is very steep."

Lyon also sees the credits as a temporary fix as they expire in 2015. He says the underlying problem hasn't been solved.

"Health care costs are rising at 3 to 4 times the rate of inflation," said Lyon. "There doesn't appear to be anything in the Affordable Care Act that slows down those rising costs."

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  • by SickofRightWing Location: Lansing on Jan 11, 2011 at 12:16 PM
    Let me guess that the majority, if not all, of you are Republican Obama-haters and would . Psst. Your Right Wing rhetoric is exposed, you might wanna cover that up.
  • by Frank Location: Lansing on Jan 11, 2011 at 05:03 AM
    WRONG, WRONG, WRONG!! PIRG was started by Ralph NADER. PIRG absolutely does NOT speak for small business. This group does, and it DESPISES the OWE-bama law. "The National Federation of Independent Business — the nation’s largest small-business lobby — will join the lawsuit that 20 attorneys general (including one Democrat) have brought against ObamaCare. "According to the Associated Press, NFIB found ObamaCare’s individual mandate particularly offensive:
  • by Todd Location: Jonesville on Jan 11, 2011 at 04:55 AM
    What do we know about PIRGIM? Nothing our government does saves us money!
  • by Mary Anne Location: Jackson on Jan 10, 2011 at 11:09 PM
    This story is so politically motivated that it churns my stomach! After 25 years in the insurance business, I can tell you for a fact that most small businesses will be hurt by the 2014 inception of the new Healthcare Law; they are already seeing taxation for a program that doesn't even exist yet! What this story doesn't tell you about is the more than 70 percent of small businesses that don't provide healthcare coverage now who will be forced to do so or pay a penalty...either way, it's costing them more money and those current employees who didn't have health coverage before will pay the price. It's like seeing unionization of workers without the dues. And once you get the government involved in insurance programs, well...don't say I didn't warn you!
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