Survey Finds Support for Health Tax Credits Among Small Businesses
More than three-quarters of small businesses said in a recent survey that they favor federal legislation that would provide low-income employees with tax credits to help pay for health insurance premiums. As part of their lobbying efforts on Capitol Hill to pass such a measure, the National Association of Health Underwriters, the Healthcare Leadership Council, the National Association of Manufacturers and the U.S. Chamber of Commerce sponsored the survey of 300 owners or benefits managers of businesses with fewer than 50 employees across the nation, including some that offer health insurance and some that do not. Some of the main findings of the study, conducted by WB&A Market Research with a margin of error of 5.7 percentage points include:
- 66% of respondents who do not provide employer-sponsored coverage cited cost as the "main factor."
- 51% of the same subset said that "the reason they don't offer coverage is that their employees cannot afford their share of the premium."
- 76% of all respondents supported a "tax credit that could be applied to purchase employer-sponsored coverage" or an individual policy.
- 71% of all respondents favored additional federal funding to help adults who do not qualify for Medicaid purchase insurance.
- 71% of employers offering insurance said that they would "cooperate in the administration of a program offering tax credits for the purchase of health insurance that could be used in the health plan they sponsor for their employees." (NAHU release, 3/19).
- CongressDaily/A.M. reports that while critics of a tax incentive program have argued that such a plan might prompt employers to drop coverage, 79% of employers who currently offer insurance said they "would be unlikely to stop offering health insurance coverage if a subsidy or tax incentive program [was] implemented, and about 53% said they would be unlikely to reduce their company's contribution toward an employee's health plan" (Fulton, CongressDaily/A.M., 3/20).
Turning Numbers Into Action
Business groups used the results of the survey to bolster their push for tax credit legislation in Congress. Michael Matznick, president of NAHU, said, "We are gratified to see that the facts strongly support the health credit proposals NAHU and our colleagues have advocated for some time. We believe that tax credits -- provided that they preserve the employer-based system -- will be a 'win-win' for everyone involved. They encourage greater employee participation and, as a result, employers will be more inclined to offer coverage" (NAHU release, 3/19). Some members of Congress also support the idea -- Sens. James Jeffords (R-Vt.), Bill Frist (R-Tenn.) and Thomas Carper (D-Del.) plan to introduce legislation this week that would provide up to $2,500 in an annual refundable tax credit for low-income families to help them purchase health insurance (Kaiser Daily Health Policy Report, 3/15). In addition to the popularity of tax credits, the survey also revealed that most employers have seen their premiums rise an average of 15% in the last year. Given the increase, Kate Sullivan, director of health care policy for the Chamber of Commerce, warned that a patients' bill of rights could have the opposite effect of tax credits -- increasing costs and discouraging employers from providing insurance (CongressDaily/A.M., 3/20). "[N]ow is the time for Congress to pursue options to make coverage more affordable, not more expensive," she said (NAHU release, 3/19). To view the full survey, go to http://www.nahu.org/news/releases/small_business_survey/survey_full_report.pdf. To read a summary of the survey, go to http://www.nahu.org/news/releases/small_business_survey/survey_executive_summary.pdf. Note: You will need Adobe Acrobat Reader to view both documents.
