REPORT: More Small Businesses Offering Insurance As A Result Of Health Reform

The Wall Street Journal’s Janet Adamy reports that “the number of small businesses offering health insurance to workers is projected to increase sharply this year,” “a shift that researchers attribute to a tax credit in the health law”:

According to a report by Bernstein Research in New York, the percentage of employers with between three and nine workers and which are offering insurance has increased to 59% this year, up from 46% last year. The report relies on data from a September survey by the nonprofit Kaiser Family Foundation.

A full tax credit is available to employers with 10 or fewer full-time workers and average annual wages of less than $25,000. The credit phases out gradually and has a cap at employers with 25 workers and average annual wages of $50,000. The White House estimates that 4 million employers will qualify for the credit.

Over the years, these small businesses have been particularly hard hit by skyrocketing health care costs and the resulting erosion in coverage is quite striking. Between 2000 and 2009, the number of firms with less than 10 workers offering coverage dropped from 57 percent to 46 percent. During the same period, the percentage of all firms offering coverage fell from 69 to 60. This year, however, the Kaiser Family Foundation Employer Health Benefit survey — on which the Bernstein report relies — found that coverage rates increased (69% of firms reported offering health benefits), but attributed the rise to the failings of non-offering firms. Bernstein, however, is crediting the tax credits.

Separately, another poll released on Monday found that “the number of companies planning to bolster health benefits for their employees jumped more than three-fold over the past seven months,” while “the number of businesses planning health benefit cuts has remained almost constant over the same span. Thirty percent of respondents said health benefits are on the chopping block, up from 29 percent in March.”