As passage of a health care reform bill seems more likely in the House and Senate, there is one small business interest group that is bucking the trend of criticism saying health care reform will lower costs for small business. When clicking on the link below please allow time for the full PDF form to download and scroll down to the beginning of the report. Perhaps some people with a better grasp of how this will shake out can look over this report by the "small business majority" which claims to be a non-partisan group. My big question is what businesses with 10 or fewer employees and average annual wages below $20,000 are we talking about here? Are there really any businesses like this operating in the United States and will they really be helped by this legislation? Any thoughts?


Written by lyceum
5167 days ago

Did you read Scott Shane's post (First, Do No Harm to Small Business?) on NYT's blog?

Here is an excerpt:

"But those affected — the 5 percent of U.S. businesses that employ 10 to 199 employees, who, in 2006, provided jobs for 37.9 million Americans — are going to get walloped. To give you a sense of the impact on these businesses, take a look at some of my back-of-the-envelope calculations:

According to 2006 census data, the average payroll of the 647,000 firms with 10 to 19 employees is $436,000. That’s just above the $400,000 cutoff where the full tax penalty will kick in. The Kaiser Family Foundation reports that 62 percent of businesses with three to 199 employees offer employee health coverage. And a White House study released over the weekend said that 22 percent of companies with 10 to 24 employees don’t offer health insurance to their workers. If we take the White House numbers, that’s roughly 142,000 firms sized 10 to 19 that will be charged a penalty, which will average $34,880 per firm.

According to the Census Bureau, the average revenue of firms of this size was $1,768,000 in 2002. So these businesses will pay about 2 percent of their revenue as a penalty under the new law. That doesn’t sound like a lot, but it actually is." (New York Times, July 29, 2009.)

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Share your small business tips with the community!