Nov 3, 2010

Health Benefits Appear On RiseBy Janet AdamyOnline.WSJ.com

The number of small businesses offering health insurance to workers is projected to increase sharply this year, recent data show, a shift that researchers attribute to a tax credit in the health law. Many small businesses, however, remain opposed to the law.

Some small businesses are benefiting from portions of the law, which includes a tax credit beginning this year that covers as much as 35% of a company’s insurance premiums.

According to a report by Bernstein Research in New York, the percentage of employers with between three and nine workers and which are offering insurance has increased to 59% this year, up from 46% last year. The report relies on data from a September survey by the nonprofit Kaiser Family Foundation.

A full tax credit is available to employers with 10 or fewer full-time workers and average annual wages of less than $25,000. The credit phases out gradually and has a cap at employers with 25 workers and average annual wages of $50,000. The White House estimates that 4 million employers will qualify for the credit.

Small-business employers have been among the hardest-hit by double-digit premium increases, which health insurers blame in part on the cost of complying with new coverage mandates in the law, like allowing children to stay on a parent’s plan until their 26th birthday.

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