Affordable Care Act's One-Year Anniversary Marks Better Benefits, Better Health for Small Businesses

This week, as the U.S. Department of Health & Human Services [HHS] marks the one-year anniversary of enactment of the Affordable Care Act, it also kicks off its Better Benefits, Better Health Initiative. This initiative will highlight the important information that consumers, families and businesses need in order to optimize the far-reaching benefits of reform.

HHS is kicking off the initiative by highlighting some important information for small-business owners. Small-business owners and their employees have always gotten the short end of the stick, paying an average of 18% more for insurance that often covers less than the policies sold to their larger competitors. And small businesses lack the purchasing power that larger employers have.

That's all changing, thanks to the health-care law signed by President Obama one year ago. Thankfully, the Affordable Care Act is helping small-business owners get quality, affordable coverage for their families and their employees.

Here are some important things to know:

* If you own a small business with fewer than 25 fulltime-equivalent employees, you may qualify for a small-business tax credit to help offset the costs of covering your employees. Small-business owners can visit www.irs.gov/sbhtc to learn more.

* HHS estimates that up to 4 million small businesses could be eligible to receive these tax credits to make employees’ health coverage more affordable. And the tax credits will be worth a combined total of $40 billion over ten years.

* Employer-based plans that provide health insurance to retirees ages 55-64 can get financial help through the Early Retiree Reinsurance Program. This program is designed to maintain health coverage for retirees, workers, and employers. Visit http://www.errp.gov/ to learn more.

* If one of your workers has been uninsured because of a pre-existing condition, he or she may be eligible to join the Pre-Existing Condition Insurance Plan. To find out about plans available in your state, please visit: http://www.pcip.gov/.

* If you are in a new insurance plan, insurance companies cannot charge you or your workers a deductible or copays for recommended preventive services; e.g., mammograms, flu shots. Click here to find a list of preventive services that will be covered without copays.

In addition, insurance companies are prohibited from capping the dollar amount of care that you or your employees can receive in a lifetime, or dropping coverage due to an honest mistake on an application when someone gets sick. And they have to spend at least 80% of your premium dollars on health care and quality improvements, instead of overhead, salaries or administrative expenses -- or provide you and your workers a rebate.

To learn more about the specific provisions of the Affordable Care Act, visit: http://1.usa.gov/ProvisionsACA.

SOURCES: HealthCare.gov [photo], IRS.gov, U.S. Department of Health & Human Services, White House
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SBA Chief Announces One-Page Form for Claiming Small-Biz Health-Care Tax Credit

SBA Administrator Karen Mills [pictured] just released an open letter to small-business owners, announcing a simple one-page form that we can use to claim the health-care tax credit for 2010. Following, is the text of her letter:

* * *

December 2, 2010

Dear Small-Business Owner,

As I've traveled the country this year, I have heard from many of you who are looking forward to the new tax credits, health insurance exchanges, and other tools that will help you provide health insurance coverage to your employees as a result of the Affordable Care Act.

The most immediate benefit of the new law is a tax credit that will help America’s smallest employers and nonprofit organizations [fewer than 25 fulltime equivalent employees with average annual wages below $50,000] who have been hit hardest by premium increases in recent years. Today, I'm pleased to announce that the Administration is releasing a one-page form and instructions [available at http://bit.ly/SmallEmployers] on how to claim this credit for the 2010 tax year.

In addition, new guidance released today answers questions that many of you have asked related to: your current contribution arrangements, eligibility for certain religious institutions, and participation by multi-employer health and welfare plans. In each case, the Administration has worked to ensure that a broad range of small businesses can qualify.

These credits are available for tax years 2010 through 2013, and for any two years after that. Through 2013, the maximum tax credit is 35 percent of premiums paid by small employers, and 25 percent for eligible tax-exempt organizations. Beginning in 2014, those levels increase to 50 percent and 35 percent, respectively.

Importantly, these credits are just one of many benefits in the Affordable Care Act. Most notably, in 2014, firms with up to 100 workers will be able to pool their buying power and reduce their administrative costs by purchasing coverage through a health insurance exchange.

Finally, the new law strengthens America’s entrepreneurial spirit, overall. For example, it outlaws discrimination against those with pre-existing conditions, giving more Americans the ability to break out of "job lock" and start their own companies. The new law also prohibits insurance companies from dramatically increasing premiums for a small business just because one worker gets sick.

Overall, the Affordable Care Act is a critical tool that will help millions of small-business owners provide health insurance to people who you often consider to be members of your extended family -- your employees. As a nation, we owe you nothing less as you work to grow, create jobs, and lead us toward full economic recovery.

Warm regards,

Karen Mills
SBA Administrator

* * *

GoodBiz113's Take
This latest move effectively underscores the Affordable Care Act's profound import to small businesses' short- and long-term financial and tax-reporting interests. Once again, the Obama Administration has demonstrated that it truly believes in the power of small businesses to propel America's economy, and has delivered on its promise to promote entrepreneurship and affordable access to health care.

SOURCE: HealthCare.gov, Internal Revenue Service, U.S. Small Business Administration
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President Obama on Removing Barriers for Small Business: 'We Have to Keep Moving Forward'

This morning, President Barack Obama met with several small-business owners and executives to discuss the economic challenges they face. Among his Oval Office visitors: Prachee J. Devadas, president & CEO, Synergy Enterprises Inc.; Anand A. Devadas, vice president of corporate operations, Synergy Enterprises Inc.; Bobby Pancake and Steve Wheat, partners of High 5 LLC, a franchisee of Buffalo Wild Wings; and Terry Haney, general manager of Buffalo Wild Wings Grill & Bar in Dover, Del.

Afterward, President Obama and his guests [pictured above] went out to the Rose Garden, where he called on Congress to pass legislation to provide new tax credits and lending incentives that will help small businesses grow and create new jobs. Following, is an excerpt from his speech:

"From the middle of 2007 to the end of 2008, small businesses lost 2.4 million jobs," Obama noted. "And because banks shrunk from lending in the midst of this financial crisis, it’s been particularly difficult for small-business owners to take out loans to open up shop or expand. It’s been hard to finance inventories and payroll and new equipment.

"Now, I’ve said before and I’ll repeat, government can’t guarantee success for these companies. But it can knock down barriers that prevent owners from getting loans. Government can’t create private-sector jobs. But it can create the conditions for small businesses like these to grow and to hire more people. That’s what’s guided much of our economic agenda.

"So let me be specific. Last year, we enacted seven tax cuts for America’s small business -- seven tax cuts. So far, the Recovery Act has supported over 68,000 loans to small businesses, which translates into nearly $29 billion in new lending.

"More than 1,300 banks and credit unions that had not made SBA loans since before the financial crisis are now lending again. More than $8 billion in federal Recovery Act contracts are now going to small businesses. In fact, Prachee has been able to add 20 part-time and full-time workers because of the Recovery Act.

"In addition, as a result of a bill I signed into law a few months ago, businesses are now eligible for tax cuts when they hire -- when they hire unemployed workers, they're eligible for tax cuts. Companies are also able to write off more of their investments in new equipment.

"And, as part of the health reform package, 4 million small-business owners recently received a postcard in their mailboxes from the IRS, and it was actually good news: It told them that they could be eligible for a health-care tax credit this year that could be worth perhaps tens of thousands of dollars to these small businesses.

"So these and other steps are making a difference. Little more than a year ago, the economy was in freefall. Today, it’s growing again. Little more than a year ago, the economy was losing an average of 750,000 jobs per month. It’s now been adding jobs for five months in a row.

"But even though we are in the process of digging ourselves out of this recession, we’re still in a pretty deep hole. Millions of our family members, our friends, our neighbors are still looking for work -- they're still faced with the prospects of long-term unemployment. Credit is still less available than it should be, particularly to small businesses.

"As small-business owners like Prachee and Bobby and Steve will tell you, we may be recovering but we’re not yet recovered. We have to keep moving forward.

"And that’s why I’m urging Congress to swiftly approve a set of tax breaks and lending incentives to spur hiring and growth at small businesses. The legislation that's being debated right now would eliminate capital-gains taxes for small investment -- for investments in small firms, which will help move capital to these companies across America. It will provide tax relief to small start-ups to encourage folks to open up businesses, as well.

"To foster more credit, the package would create the small-business lending fund I proposed in my State of the Union address, to help underwrite loans through community banks. And we’d create a new state small-business credit initiative, because states facing budget shortfalls are scaling back lending to small firms and manufacturers; that's working against our recovery. I’m also urging Congress to expand and extend successful SBA programs -- by increasing loan limits, for example -- something that could benefit people like Bobby and Steve.

"In fact, since the start of my administration, we’ve been hearing from small businesses that want to retain and hire more employees, but they need additional credit. And we’ve been hearing from small community banks that want to lend more to small businesses, but they need additional capital. So this bill helps fulfill both needs. And to help us create jobs without adding to our deficit, we’re making the tough choices to pay for these proposals.

"So I’m hopeful that the House will pass these measures next week, and that the Senate will follow as soon as possible -- with both support from Democrats and Republicans. And I’m eager to sign this tax relief and additional lending into law. That’s how we can continue to move our economy forward -- to continue on the path from recession to recovery, but also, ultimately, to prosperity."

To view a video of today's Rose Garden event, including President Obama's entire speech, go to: http://bit.ly/SmallBizBarriers.

SOURCES: HealthReform.gov, IRS.gov, U.S. Small Business Administration, The White House [photo]
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May Labor Report Shows Fifth Consecutive Month of Employment Growth; Private Sector Has Added 495,000 Jobs Since December

Data released this morning by the Bureau of Labor Statistics [BLS] show that job growth, while slow, is consistently on the upswing. Nonfarm payroll employment rose by 431,000 in May, reflecting the hiring of 411,000 temporary workers for Census 2010. The unemployment rate edged down to 9.7 percent. Private-sector employment showed little change over the month [+41,000], but has increased by 495,000 since December.

"These numbers indicate that the steps this administration has taken over the past year have put the American economy on the right track," said U.S. Labor Secretary Hilda Solis. "The most recent estimates from the Council of Economic Advisers [CEA] indicate that the Recovery Act saved or created between 2.2 and 2.8 million jobs through the first quarter of 2010, and helped raise gross domestic product for a third straight quarter. The economy has added jobs in six of the last seven months.

"While we are encouraged to see the economy strengthening and employers starting to hire again, we recognize more work has to be done to ensure every American who wants a job has access to a good job. For the millions of Americans who have struggled to find work in the last year, the economy is still in a recession. As the president said on Wednesday, '[This] will not be a real recovery until people can feel it in their own lives.' The administration is continuing to work with Congress to provide further support that will ensure a rapid recovery.

"We continue to push for programs to help unemployed workers make it through this difficult time. Extending expiring unemployment benefits and health coverage is vital. I call on Congress to extend the unemployment insurance and COBRA subsidy provisions in the Recovery Act through the end of the year. The President has called on Congress to expand the clean-energy manufacturing tax credit, and to help small businesses with tax cuts and a lending fund to help them get the credit they need to create jobs.

"The Department of Labor also has taken important steps to invest in programs that retrain and prepare unemployed workers with the skills and knowledge for 21st century jobs in emerging industries like clean and renewable energy, health care and information technology.

"Many of these programs have been targeted toward populations with the greatest barriers to re-employment and areas with high levels of poverty. Recently, the department made available $90 million to the states for on-the-job training to help displaced workers gain job skills and experiences that will help them secure future employment.

"The economy and jobs situation will continue to be our No. 1 focus in the year ahead. We clearly have much more work to do to get Americans back to work, and the Department of Labor is committed to helping get our country back on track.”

CEA Chair Christina Romer shared her wide-angle view of the just-released jobs numbers. "The fact that the unemployment rate fell and private employment rose are obviously encouraging signs that recovery continues," she noted. "At the same time, the continued high level of unemployment and the slowdown in private-sector job growth emphasize the need for continuing vigilance...

"As always, it is important not to read too much into any one monthly report, positive or negative. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Emphasis should be placed on persistent trends, rather than month-to-month fluctuations."

GoodBiz113's Take
Growth is growth. You can focus on the fact that our nation's unemployment rate is at 9.7 percent, or you can breathe a little easier that employment numbers are gradually trending upward.

We're sharing the glass-is-half-full perspective of GoodBiz113 profilee Life is good® ["Life is good® Festivals Unite Communities, Help Kids Face Unfair Challenges"], who -- just this morning, in fact -- tweeted this timely post: "We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses."

Regardless of what the weather does in your corner of the universe, have a sunny weekend :)

SOURCES: Bureau of Labor Statistics, Council of Economic Advisers [chart], U.S. Department of Labor, The White House
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Tonight: President Barack Obama on 'Larry King Live'

This evening, Larry King, who's celebrating 25 years hosting CNN's popular "Larry King Live" show, interviews President Barack Obama. Among the topics discussed: immigration, economic recovery, health-care tax credits for small businesses, the BP environmental disaster [AKA "oil spill"], plus myriad other challenges that President Obama faces in what he calls "the best job on Earth."

Later, Bob Woodward, New York Times best-selling author and Pulitzer Prize-winning journalist of the Washington Post, weighs in on President Obama's first 500 days in office. Woodward's yet-to-be-titled book on the Obama administration will be released in September.

To watch a sneak-preview video clip of tonight's show, go to: http://bit.ly/ObamaKing25.

To watch the entire program, tune in to CNN at 9 p.m. ET.

SOURCES: CNN, The White House [photo by Lawrence Jackson]
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SBA Administrator Explains Important Health Care Tax Credit Info for Small Businesses

Administrator Karen Mills [pictured], of the U.S. Small Business Administration [SBA], has just written an open letter to small-business owners across the United States, explaining the immediate benefits available to small businesses as part of the Affordable Care Act.

Following, is the full text of her letter:

* * *

Dear Small-Business Owner,

For decades, access to affordable health insurance has been the No. 1 concern of small-business owners. To help you address that concern and provide quality, affordable coverage for your employees, the new Affordable Care Act gives you a number of new tools and benefits.

The most immediate benefit you should know about is the tax credit to help you pay for up to 35 percent of your employee premiums starting this tax year. An estimated 4 million small businesses may qualify for these tax credits, totaling about $40 billion over the next 10 years. Go here to learn more about the tax credit, including new information that explains how this federal credit is in addition to state-level credits you might receive, and how dental and vision coverage are also eligible for the federal credit.

The Affordable Care Act also included reporting requirements if you pay another business $600 or more, starting with 2013 filings. Small-business groups have voiced concerns about the possible burden this places on people like you. That’s why the IRS is already planning to exempt from this requirement your transactions that use credit and debit cards.

Also, the IRS, SBA and others in the Administration are looking for additional ways to minimize burdens and avoid duplicative reporting. We welcome your comments and input as we move forward together to address implementation issues under the new law.

Over the last 16 months, this Administration has taken steps to provide tax relief that puts more money in the hands of small-business owners like you -- including write-offs for new equipment, credits for hiring unemployed workers, and capital-gains exclusions for small-business investors. We know that sensible tax relief like this will help you grow your business, create new jobs, and continue drive America’s economic recovery.

With warm regards,

Karen Mills

* * *

For detailed information about the new Small Business Health Care Tax Credit, visit IRS.gov: http://bit.ly/SmallBizTaxCredit.

SOURCES: Internal Revenue Service, U.S. Small Business Administration, The White House
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March 31 @ 7 p.m. EST: HHS, SBA Leaders to Hold Live Q&A Webcast About Health Insurance Reform's Impact on Small Businesses

To help everyone better understand implementation of the new health reform law, the U.S. Department of Health and Human Services [HHS] is holding a live, online Q&A session tomorrow evening, Wednesday, March 31, from 7-7:30 p.m. EST at www.hhs.gov/live. The event features HHS Secretary Kathleen Sebelius [pictured] and U.S. Small Business Administration [SBA] Administrator Karen Mills clarifying the new health insurance reform law's impact on small businesses.

"A lot of people have questions about this comprehensive and complicated legislation," Sebelius wrote in her announcement of the Web Chats. "This will be the first in a series of weekly webcasts and discussions we here at the Department of Health and Human Services will hold with you, the American people, as we work to implement this new law and ensure health security for Americans who have, until the passage of this bill, been paying more and more for health care and getting less and less in return."

To participate in tomorrow's event, e-mail your questions in advance to HealthReform@hhs.gov. Sebelius and Mills will try to get to as many of them as they can during the Web Chat, then answer more via the HealthReform.gov site afterwards.

"Already, I’ve received countless questions from small-business owners about the new law and its benefits," said SBA's Mills. "In fact, this new law offers many tools to help small-business owners access more affordable health insurance options for their employees. These tools include the creation of 50 state exchanges that will allow small-business owners to access affordable health insurance plans for their employees, as well as new tax credits to help pay for this coverage."

"As the President told me recently, we have a solemn responsibility to make sure health reform is implemented carefully and effectively," Sebelius noted. "And we have an equal responsibility to make sure Americans know what changes are coming and how to take advantage of these new benefits...

"Our health insurance system wasn’t broken in a day. And it won’t be fixed in a day either. It’s going to take a lot of work. But the good news is that, after decades of talking about the need for these changes, that work is finally beginning and we want you to be a part of our efforts."

"I know you want to know what’s in health insurance reform for your small business and your employees," Mills added. "I hope you’ll join Secretary Sebelius and me at http://www.healthreform.gov/ tomorrow night, at 7 p.m. EDT to find out what’s in it for you."

To learn more about the key provisions of health reform that immediately take effect, go to: http://bit.ly/KeyProvisions.

SOURCES: HealthReform.gov [photo], U.S. Department of Health and Human Services, U.S. Small Business Administration, White House
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Sebelius, Mills Release New Report, 'Insurance at Risk: Small Business Employees Risk Losing Coverage'

Secretary of Health and Human Services [HHS] Kathleen Sebelius [pictured] and Small Business Administration [SBA] Administrator Karen Mills today released a new report, "Insurance at Risk: Small Business Employees Risk Losing Coverage."

The report examines the health-care status quo that has left employees at risk of losing their insurance, and underscores the financial difficulties small businesses face when providing health insurance to their employees. The complete report, along with a list of sources cited, is available now at http://bit.ly/HealthReformSmallBiz.

"More Americans who work for a small business have lost their health insurance coverage, and those who still have coverage have seen their costs go up," said Sebelius. "Health insurance reform will drive costs down and make it easier for small-business owners to give their employees the quality coverage they need."

"The cost of health insurance is the No. 1 concern of small-business owners," Mills noted. "On average, small businesses pay 18 percent more than big businesses for the same health insurance policy. This has left small-business owners in an untenable situation, having to choose between their employees -- who are often like family to them -- and the bottom line. Health care reform will provide small-business owners with greater access to the affordable, quality coverage they want and need for themselves and their employees."

The new report notes:

* Employees of small businesses are 50 percent more likely to lose coverage as workers at large businesses. Half of workers in small firms that do not offer health benefits remain uninsured.

* Premiums for employer-based health insurance have more than doubled since 2000, rising three times faster than wages. As a result, fewer small businesses provide coverage for their employees. In 2000, 57 percent of firms employing fewer than 10 workers provided coverage. In 2009, only 46 percent of similar-sized firms provided coverage.

* In one national survey, nearly three-quarters of small businesses that did not offer benefits cited high premiums as the reason; and, on average, small businesses pay up to 18 percent more than large firms for the same health insurance policy. This is due, in part, to high broker fees [which can be up to 10 percent of premiums] and health plan administrative costs that are three to four times those in the large-group market.

Health insurance reform will stabilize health insurance coverage for Americans who work for small businesses, and provide small businesses with tax credits to help them provide health insurance for their employees. This will make health care more affordable for small businesses and their workers, solidifying and strengthening employer-based coverage for years to come.

Health insurance reform will also create a health insurance exchange, so that Americans without access to affordable insurance on the job can compare prices and health plans, and decide which quality affordable option is right for them. The exchange will also significantly reduce administrative costs for small businesses by enabling them to easily and simply compare the prices, benefits, and performance of health plans.

To learn how the current system has failed millions of Americans, and what President Obama’s Administration is doing to work with Congress to enact comprehensive health reform this year, check out these Web-based resources:

* Online Series on Health Reform: http://bit.ly/HealthReformOnline

* White House Reports on Health Reform: http://bit.ly/WhiteHouseHealthReform

* Health Insurance Reform Reality Check: http://www.whitehouse.gov/realitycheck/

* Video: "Reform Will Benefit Small Business -- Not Burden It": http://bit.ly/RealityCheckSmallBiz

* How Health Insurance Reform Will Help Small Business: http://bit.ly/HealthReformHelpSmallBiz

* Council of Economic Advisers Report, "The Economic Effects of Health Care Reform on Small Businesses and Their Employees": http://bit.ly/EconomicEffectsSmallBiz

SOURCES: U.S. Department of Health and Human Services, U.S. Small Business Administration, White House
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