subject: The Us Health Reform Bill Is Said To Be Beneficial For Small Businesses [print this page] There has been a lot of buzz going around regarding the US Health Reform Bill. Many have doubts about how it will be affecting their business decisions, while others, especially the small businesses with a handful of employees are in dilemma whether or not this new bill would require them to provide insurance to their employees. The later mostly includes industries like fast food outlets, restaurants and dry cleaning etc. This new Health Reform Bill is said to make the insurance coverage more affordable for small business owners.
Presently, the small businesses have to pay 18 percent higher premium on an average than the large companies in order to provide same insurance coverage to their employees. However this bill, along with its Small Business Health Care Tax Credit facility, will help the small business owners to afford the cost of the insurance premium. This tax credit is said to cover around 35% of the total premium. Moreover, the federal government has claimed that they will increase the rate to 50% in 2014.
Another employee related problem that many small business owners may face is the price discrimination with the sick workers. This bill also claims to end this price discrimination. With these sick workers, small businesses often face problems like sudden price increases. The premium rate become significantly higher with sick workers. Things may get worse including precipitous price increase if workers starts falling ill. The community rating rules, which will be starting from 2014 will stop the insurance providers from increasing the premium rates for small businesses with sick workers.
This bill will also reduce the administrative costs of small scale businesses and will also increase their bargaining power. The administrative costs that is required to set up as well as maintain a health plan for the employees is usually higher for small businesses. Such premiums include 3 to 4 times higher administrative cost in comparison to the plans designed for the large group markets. Since such businesses lack in bargaining power, they cannot even afford to negotiate with the insurance companies. With the Health Insurance Exchanges, starting by 2014, businesses with up to 100 employees will have more choice, better bargaining power and lower prices. This exchange through which small businesses can purchase insurance plans will enable them to pool their buying power.
One of the reasons why most of the employees prefer to work with large firms is the latter's ability to offer family health insurance coverage. It is also applicable for employees with pre-existing health conditions as large firms can offer policies big enough to absorb such costs. Many believes that, if these limitations are removed than more and more people will be willing to become an entrepreneur or get involved in small firms for more productive working. This new bill seeks to provide health security for every American as well as eliminates price discrimination and exclusions for pre-existing conditions. With such benefits, the small firms too can attract more and more eligible employees to work for them.
Finally, it claimed be reducing all kind of hidden taxes on the premium rates. The cost of treating employees who are uninsured also adds hidden tax to every health insurance premium. This Health Reform Bill is said to be covering around 32 million additional Americans by the year 2019, which will significantly reduce such hidden taxes.
