Obama administration outlines five ways the health care law benefits small businesses


President Obama has said the health care law will benefit small businesses. One of his special assistants explains how in a new blog post. (SAUL LOEB/AFP/Getty Images)
August 15, 2013

The Obama administration is ramping up its efforts to sell the health care law to small business owners, with the start of enrollment now only six weeks away.

In a new entry on the White House blog, Ari Matusiak, the administration’s director of private sector engagement, has outlined five ways the Affordable Care Act, commonly called Obamacare, will “provides benefits and opportunities to small businesses that will help increase access to affordable coverage options.”

His five points, in summary:

1. Health exchanges will lower costs: Opening for enrollment in October, the law’s new small business health insurance exchanges will bring “unprecedented transparency to the market,” Matusiak said, which will encourage insurers to lower rates for employers.

2. Health exchanges will reduce complexity: Matusiak added that those exchanges will provide an easily accessible and standardized online portal that will make purchasing insurance much simpler for business owners.

3. New tax credits make insurance more affordable: A new tax break for small businesses can offset as much as 35 percent of the cost of coverage next year, he said, and that credit jumps up to 50 percent in 2014.

4. Risk pooling increases purchasing power: Those new small business insurance exchanges will allow small groups to pool their risks and purchase health insurance collectively, which the administration believes will help them obtain lower premiums.

5.Incentives for healthy workplaces: Obamacare includes a number of incentives to encourage workers to stay healthy, allowing employers to charge unfit employees 30 percent more for coverage than those who meet wellness program goals. Matusiak argued this can help improve the overall health inside companies.

The post is part of a broader effort by the administration to sell individuals and employers on its signature law, the success of which, experts have said, depends heavily on the size of enrollment in the new insurance exchanges.

It follows one week after the White House unveiled a new online tool that lets small business owners input their location and company size to receive tailored information about the changes coming their way under the law.

Matusiak’s arguments stand in stark contrast to comments from conservatives and many small business groups, who have warned that the law will place enormous new burdens on the nation’s smallest employers.

They have pushed back on nearly every one of the five claims above, arguing that rates will continue to rise in the years ahead, rules will become increasingly complex, and, due to certain exclusions for very small firms, many small businesses will reduce hiring or lay off workers to stay under the caps.

What do you think of the five points above? Will your business benefit from Obamacare?

Follow On Small Business and J.D. Harrison .

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.
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