GAO: Health Law’s Tax Credit For Small Businesses Underperforms
A Government Accountability Office report found that only about 17 percent of the businesses that would otherwise be eligible for the maximum tax credit offered health insurance to employees.
The Hill: GAO: Tax Credit In Health Care Law Underperforms
Only about 17 percent of the businesses that would otherwise be eligible for the maximum tax credit offered health insurance, according to government data cited in the GAO report. The tax credits are administered on a sliding scale, covering up to 35 percent of a company's healthcare costs. "While some small employers could be eligible for the credit if they began to offer health insurance, small business group representatives and discussion group participants told us that the credit may not offset costs enough to justify a new outlay for health insurance premiums," GAO said (Baker, 5/21).
Politico Pro: GAO: Small Businesses Skip Tax Credit
Republicans pounced on the news to paint the ACA as an unworkable and confusing thicket of regulation. "The failure of these small business tax credits goes to the heart of what's wrong with ObamaCare: It's confusing, expensive, and burdensome for the families and businesses that have to comply with it," U.S. Sen. Orrin Hatch (R-Utah) said in a statement (Cheney, 5/21).
CQ HealthBeat: GAO: Small-Business Tax Credit Is Chump Change For Effort Involved
The credit, designed to encourage small businesses to purchase coverage for their employees, was claimed by 170,300 employers in tax year 2010, a small portion of the 1.4 million to 4 million participants government agencies and small business advocates expected, GAO said. Most of the claims, 83 percent, were for partial credits rather than the full 35 percent available. The average credit amount claimed in 2010 was $2,700 (Bristol, 5/21).
Modern Healthcare: Few Businesses Claiming Health Insurance Tax Credit: GAO
Depending on the estimate, 4% to 12% of small businesses eligible for health insurance tax credits claimed them in 2010, according to a new report. The tax credit was included in the Patient Protection and Affordable Care Act to induce small businesses to offer health benefits but failed to do so, the Government Accountability Office said (Evans, 5/21).