The Health Reform Law Makes it Easy to Get Health Insurance For Small Businesses

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During President Obama’s campaign, as he went throughout the country extolling the virtues of health care reform, a plumber stood up and declared he could not possibly do business if he were forced to buy one of the packaged health insurance for small businesses then available. The plumber, who was actually an unlicensed plumber (in my state, if you’re not licensed, you’re not a plumber), said he had obtained funding to start his own plumbing business, but if he were required to buy health insurance for his employees, he couldn’t afford to go into business after all. The Republicans latched on to this character’s story to argue against Obama’s proposals for universal health care coverage, but the argument went nowhere, Obama won, and by 2010, a health care reform bill was signed. As it turned out, unless Joe the plumber intended to have 50 or more employees, he would not have to provide health insurance for his employees.

Joe the plumber wasn’t trying to deny the responsibility of business to supply health insurance plans to the employee. It’s been an acceptable practice for decades and embraced by conservatives and liberals alike. Business itself has met their responsibility with exuberance and dignity all these decades, taking lesser profits in order to do it. Currently, 98 percent of companies with 200 or more employees provide health care insurance plans for their employees. About 150 million Americans are employer insured, and that number is expected to grow to 159 million by 2019. The new Health Reform Law continues to rely on business to provide working Americans with the health insurance they need.

Health insurance for small businesses is not as inexpensive as health insurance for businesses with 200 or more employees. This is because insurers give discounts based on the number of people to be insured. Naturally, a larger organization will be able to obtain those hefty discounts while smaller businesses can’t. This gives  something of a competitive advantage to larger business: because they can offer prospective employees health insurance as a benefit and the small businesses  can’t, the best talent goes to the bigger guys. The small business, unable to offer health insurance, also suffers a greater turnover of employees as they tend to leave the business for larger ones able to provide health insurance. Lacking what other workers of equal caliber get, small business employees are more demoralized. Being unable to afford health insurance for small businesses makes doing business as a small business a hard proposition indeed.

Now, small business is in luck. The Health Reform Law is enabling small businesses,  with as few as 25 employees, to get health insurance for small businesses this year (2010) by providing taxes credits for those who do. In addition, the law provides for the building of medical insurance exchanges throughout the country. These exchanges will represent hundreds, thousands, or millions of individuals and small businesses as a group to insurers. It’s the large numbers that have given large corporations leverage to get those lower premiums for their employees. Now, individuals and small business owners with their employees will be counted as a group under the exchange and be eligible for those nicely affordable group rates.

The exchanges are still in the initial stage of development – not ready yet. Expect to see them functioning by 2014. Then, small businesses with 50 or more employees will be required to provide insurance to their employees. Hopefully, these exchanges will make health insurance for small businesses as cheap as it is for the big guys, and give the small businesses an opportunity to attract those valuable, highly skilled employees. There’s an answer for most social issues, Joe the Plumber. All you have to do is seek and you’ll find.

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