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The Impact of the Affordable Care Act on Small Businesses

The Impact of the Affordable Care Act on Small Businesses
The Impact of the Affordable Care Act on Small Businesses
The Impact of the Affordable Care Act on Small Businesses

In the past, the health insurance market benefitted only large businesses and organizations, leaving small businesses to fend for themselves. The value of providing health insurance to employees is immeasurable, but small businesses lack the insurance purchasing powers that larger employers have.

According to "A small business paid an average of 18 percent more for the same health coverage as large businesses.” Under the Affordable Care Act (ACA) - gone are the days where because you are a small business, you didn’t get the credit that you deserved.

On March 23, 2010, President Obama signed the Affordable Care Act which puts in place comprehensive health insurance reforms that will take effect over the next three years. The motivation behind signing the act into law was to hold insurance companies accountable, help drive down health care cost, and to give hard working families and employers the security they deserve.Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014. 

Some of the benefits small businesses will gain as a result of the ACA include: lowering premium cost growth, increasing access to quality, and affordable health insurance. As of October 2013, small business owners will be able to shop for private health insurance in a new affordable insurance exchange market. The exchange will give small businesses the opportunity to compare qualified health plans, get answers to questions, find out if they are eligible for tax credits, and enroll in a heath plan that meets their employee needs. The Health Insurance Market is designed to make buying health coverage easier and more affordable. For small employers, these provisions will level the field, offering them more choice options and insurers at a lower cost, the way larger employers have now. Lastly, starting in 2014, up to four million small businesses will be eligible for tax credits to help them provide insurance benefits to their workers. The first stage of this provision provides a maximum credit of up to 35% of the employer’s contribution to the employees’ health insurance. Small non-profit organizations may receive up to a 25% credit. This will make the cost for providing insurance even lower. In addition, even if you are a small business employer who did not owe taxes during a certain year, you can still benefit from the credit because it can be carried backwards or forward.

The ACA helps small business close the gap between insurance companies and their purchasing power. For additional resources you can visit: The U.S. Small Business Administration’s health care web page at




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