The Affordable Care Act offers tax cuts for thousands of small businesses in Illinois, according to advocates at a Thursday forum in Rock Island.
Jim Duffett, of the Illinois Campaign for Better Health Care, said that -- like it or not -- the ACA is here to stay and, although imperfect, the benefits for small businesses far outweighed the negatives. Health-care reforms included in the 2010 law are being gradually rolled out.
Mr. Duffett spoke at an event at Community Health Care, Rock Island, hosted by the Greater Quad Cities Hispanic Chamber, the Illinois Small Business Center at Black Hawk College and the Small Business Majority.
The ACA, commonly called Obamacare, requires businesses with more than 50 employees to provide health insurance if they don't already. Businesses with fewer than 50 workers do not face the requirement.
Employers with fewer than 25 employees, however, can get tax credits if they offer coverage equal to between 35 and 50 percent of the cost of premiums, said Mary Timmel, of the Small Business Majority, a non-profit advocacy group. According to the group, 198,910 Illinois businesses in 2011 had fewer than 25 workers. The value of tax credits for those businesses was more than $634 million.
There also are provisions for farmers or other small businesses who hire seasonal employees to keep them under the 50 employee threshold, Ms. Timmel said. The threshold only applies to full-time workers hired for more than 120 days.
Only 4 percent of businesses nationwide have more than 50 employees, she said. Only a fraction of those don't already offer employees some form of health insurance.
Thursday's forum also discussed online health insurance exchanges, or marketplaces, the ACA requires to be started by 2014. The marketplaces, available to small businesses and individuals, lets consumer review different plans and compare prices, Mr. Duffett said. Insurance plans in the exchanges also will have to meet quality guidelines.
Business with more than 50 workers that don't offer coverage and have at least one full-time employee who receives a tax credit to buy insurance on their own will have to pay a $2,000 penalty for each full-time employee. The company's first 30 employees will be exempt from the penalty.
Illinois is looking at how its marketplace will be managed, Mr. Duffett said. He wants it to have the power to bargain with insurers to lower rates and to be independent of insurance interests.
He said about 75 percent of the Illinois health insurance market is controlled by just two companies, Blue Cross Blue Shield and Wellpoint.
The marketplaces should increase bargaining power for small business, Ms. Timmel said. On average, small business pay 18 percent more than larger business for health insurance, she said.
The cost to run Illinois' health insurance exchange is projected at $54 million to $89 million, with a debate over how to fund it. Mr. Duffett favors having insurers cover the cost.
The ACA, which includes an expansion of Medicaid, will be funded nationally from fees on the health care industry. Those fees have met protest, especially from Republicans. But the health industry is expected to gain millions of new customers because of ACA, according to the Small Business Majority.
Starting in 2018, taxes will be placed on health insurance plans if the cost of premiums is more than $10,200 a year for an individual or $27,500 for a family. The tax is meant to discourage use of high cost plans.
About 25 people attended Thursday's forum, including at least two opponents: Republican state senate candidate Bill Albracht and Republican Rock Island County Recorder candidate Tony Holland. After the forum, they both said they saw a lot of positives in the ACA.
Mr. Holland said he still had problems with parts of the law that he said expand government, such as the boards that will oversee the marketplaces. Mr. Albracht said he wanted more information on the law.