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Federal Health Reform and Small/Medium Businesses

Background

Current health reform proposals may have a large (and we think positive) impact on how small businesses purchase health insurance. Small businesses face certain disadvantages in our current health insurance market. Because of their size, small businesses lack the market power to negotiate lower rates with insurers and thus spend an average of 18% more than large businesses for comparable health coverage due to their higher administrative costs. Health reform proposals could support small businesses by improving their abilities to provide quality and affordable health coverage to employees. Reforms, such as the formation of a Health Insurance Exchange, could improve competition and give small businesses stronger market power to negotiate lower rates. Health insurance tax credits for the smallest businesses with the biggest coverage challenges could increase affordability of health coverage for small employers. By increasing coverage, raising quality, and lowering costs, health reform has the potential to increase workplace productivity while also reducing employee absenteeism.

Continued in the full-text download below.

Federal Health Reform and Small Business Federal Health Reform and Small Business.pdf

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