Just more than a month since he signed sweeping health care reform, President Obama today said millions of Americans have or are soon to receive “real benefits” from the legislation, including many small business owners who can start to take advantage of tax credits to encourage expanding or maintaining coverage for their employees.
“Two weeks ago, four million small business owners and organizations found a postcard in their mailbox informing them that they could be eligible for a health care tax cut this year,” Obama said in his weekly address.
Starting in June, he also said businesses will get more relief for providing coverage to retirees who are not yet eligible for Medicare.
The tax credit package to small businesses represents one of the first provisions of a healthcare reform – the Patient Protection and Affordable Care Act – to take effect.
The maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. They are in effect until 2013.
The highest credit goes to employers with 10 or fewer full-time employees (FTEs), paying an annual average wage of $25,000 or less. Businesses that use part-time help may qualify even if they employ more than 25 individuals.
Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011.
Obama also said that on Monday the administration will be announcing a new rule that allows young adults without insurance to stay on their parents’ plan until they turn 26 years of age – another component the recently-passed healthcare reform.
Obama spent most of his address speaking of actions already undertaken by insurance companies as part of reform, but sometimes after state or federal officials have demanded action.
Here are excerpts from President Obama’s address:
On insurance company rate hikes:
“After our administration demanded that Anthem Blue Cross justify a 39% premium increase on Californians, the company admitted the error and backed off its plan. And this week, our Secretary of Health and Human Services, Kathleen Sebelius, wrote a letter to all states urging them to investigate other rate hikes and stop insurance companies from gaming the system. To help states achieve this goal, we’ve set up a new Office of Consumer Information and Insurance Oversight, and will provide grants to states with the best oversight programs.”
On new patients’ bill of rights:
“In the next month, we’ll also be putting in place a new patients’ bill of rights. It will provide simple and clear information to consumers about their choices and their rights. It will set up an appeals process to enforce those rights. And it will prohibit insurance companies from limiting a patients’ access to their preferred primary care provider, ob-gyn, or emergency room care.”
On insurance companies dropping coverage:
“We’re holding insurance companies accountable in other ways, as well. As of September, the new health care law prohibits insurance companies from dropping people’s coverage when they get sick and need it most. But when we found out that an insurance company was systematically dropping the coverage of women diagnosed with breast cancer, my administration called on them to end this practice immediately. Two weeks ago, the entire insurance industry announced that it would comply with the new law early and stop the perverse practice of dropping people’s coverage when they get sick. “
