SOME SKEPTICAL AS ADMINISTRATION SEEKS TO EXPAND

SMALL BUSINESS HEALTH CARE TAX CREDIT

Resumen (resea)

The proposal would also eliminate the cap that limits eligible employer contributions to the
amount an employer would have contributed if it offered the plan with the average premium in
the state -- a requirement that the administration now says is complicated and unnecessary
given other incentives to control premiums. [...] the administration wants to get rid of the
uniformity requirement that makes employers who claim the credit contribute the same
percentage of the cost of each employee's insurance.

Texto completo
Posted: February 16, 2012
The Obama administration is calling on lawmakers to expand the health reform law's small
business tax credit by increasing eligibility to additional businesses, adopting a more generous
phase-out schedule and streamlining the rules governing the credit, but some small business
representatives are not convinced the proposal would do enough to increase participation in the
underutilized program. Administration officials said Thursday (Feb. 16) they have offsets to fully
pay for the estimated $14 billion, 10-year cost of the expansion but would not say what the
offsets are, only that they are included in the 2013 budget.
The expansion proposal comes three months after a report by the Treasury Inspector General for
Tax Administration found that as of May 2011 only 228,000 taxpayers had claimed the credit,
and the program was largely untapped due to its complexity.
Currently, businesses with less than 25 full-time employees or proportional part-time workers
currently qualify for the credit under the Affordable Care Act, and the White House wants to let
businesses with up to 50 workers qualify for the credit. The expansion would double the number
of full-time employees an eligible business could have on the payroll, increasing the number of
eligible businesses by half a million and potentially affecting up to 4 million workers,
administration officials said Thursday as they touted the proposal, which is tucked into the White
House's 2013 budget request.
But Katie Mahoney, executive director of health policy for the U.S. Chamber of Commerce, says
the organization is skeptical about the extent to which the proposed changes would increase

participation in the program. "We've been disappointed to see the tax credit, praised and
trumpeted as this great opportunity, was not something that most businesses could take
advantage of," Mahoney says. Companies, she says, were struggling most with the limit on the
number of full-time or equivalent employees imposed by the reform law in order to businesses
to be eligible for the small business tax credit. While raising the cap to 100 full-time workers
would potentially help, the Chamber remains skeptical about how much help raising the cap to
50, as proposed by the administration, would be.
Nonetheless, she says that the proposed expansion is a step in the right direction, adding that
the original tax credit did not help enough business owners or create incentives to change
behaviors.
Those at the Main Street Alliance, however, said the expansion was exactly what small business
owners at Upper Main Street have been asking for, as the proposal would prevent businesses
from growing out of the current tax credit.
The administration's proposal would also eliminate the requirement that employers claiming the
credit determine that they contribute the same percentage of the costs of each employee's
health insurance. Employers would still be required to contribute at least 50 percent of the
premium.
The proposal would also eliminate the cap that limits eligible employer contributions to the
amount an employer would have contributed if it offered the plan with the average premium in
the state -- a requirement that the administration now says is complicated and unnecessary
given other incentives to control premiums.
Moreover, the administration wants to get rid of the uniformity requirement that makes
employers who claim the credit contribute the same percentage of the cost of each employee's
insurance. Eligible business owners would still need to contribute at least 50 percent of the
premium.
The Treasury Department said it is conducting an information campaign to help increase the
number of eligible participants taking advantage of the program, and the IRS has sent out
postcards with program information to about 4 million businesses.
The Obama administration said it expects 306,000 to claim the credit for 2011, and an
expansion of the program could lead to 500,000 claiming the credit.

But, reacting to the program's lack of success so far, Sen. John Barrasso (R-WY) said failing to
reach 6 percent of the eligible businesses shows the reform law, including the tax credit, is too
bureaucratic. "Tinkering with tax credits won't make it any easier for America's small business
owners to deal with the President's health care law," Barrasso said.
Nmero de palabras: 688
Copyright Inside Washington Publishers Feb 22, 2012

Indexacin (detalles)
Citar
Materia
Small business;
Tax reform;
Employees;
Health care policy
Ttulo
SOME SKEPTICAL AS ADMINISTRATION SEEKS TO EXPAND SMALL BUSINESS HEALTH CARE TAX
CREDIT
Autor
Stein, Michelle M
Ttulo de publicacin
InsideHealthPolicy.com's Inside Health Reform
Tomo
4
Nmero
8
Ao de publicacin
2012
Fecha de publicacin
Feb 22, 2012
Ao
2012
Editorial
Inside Washington Publishers
Lugar de publicacin
Arlington
Pas de publicacin
United States
Materia de publicacin
Medical Sciences
Tipo de fuente
Trade Journals
Idioma de la publicacin
English
Tipo de documento
News
ID del documento de ProQuest
922514215

URL del documento

http://search.proquest.com/docview/922514215?accountid=31201
Copyright
Copyright Inside Washington Publishers Feb 22, 2012
ltima actualizacin
2014-06-14