The airwaves have been buzzing lately over whether the small business health insurance tax credit is all it’s cracked up to be. But here’s a question: When is free money not all it’s cracked up to be? Maybe when that money is made possible by a health-care reform law that some politicos are waging an ideological war against.
Encompassing many measures that positively affect millions of people, the Affordable Care Act helps small business owners like me better afford health coverage for our families and our employees. As the mother of a son who needs ongoing medical care due to a preexisting condition, and as an entrepreneur who takes pride in offering employer-sponsored health insurance to the eight employees who qualify and to their families, I am doubly thankful for the law.
By taking advantage of the reform law’s health insurance tax credit, my Salt Lake City business saved $11,000 on our premium contributions in 2010 and slightly less in 2011 since two insured employees moved away. The savings afforded by the tax credit both years has allowed me to continue offering benefits to deserving employees who’ve been with me for years at the King’s English Bookshop. We’ve recently added an employee and expect our tax credit to grow again—especially in 2014, when it increases to 50 percent.
Just a few years ago, our health-care premiums grew so high (well more than $70,000 a year, an amount that increased our payroll to an unsustainable 30 percent of our gross) that I seriously considered closing up shop. Bookstores are at a competitive disadvantage with the Internet right now, and after 35 years in business it would have been a shame if we were forced out the way so many booksellers already have been. Our health-care savings have put those worries on hold. We have other worries, of course, Internet sales chief among them, but with the support of our community and our staff, an active event calendar (authors, who support independent booksellers, visit from all over the country), and our growing technological abilities, we are surviving.
That’s why I’m so surprised—and disappointed—by all the negativity surrounding the tax credit. The economy is still on shaky ground, and I know I’m not the only one struggling to turn a profit. Because I fit so exactly into the parameters of the act, I qualified for more money than some others are getting back, but I still believe any business owner would welcome extra cash. There’s also been a lot of hubbub over the complexity of claiming the credit, but our accountant told me she didn’t have trouble with it.
In fact, it was through my accountant that I first heard about this opportunity. Like any thorough professional working to help businesses and other customers save money, she checks frequently for new developments in the tax world. Last year, the health-care credit was one of them. Able to calculate our savings without difficulty, she charged no extra fee for doing so. Tax laws change every year, and as far as I’m concerned, it’s an accountant’s job to keep up with those changes. The tax credit is no different.
Except for the fact that it carries political weight—right now, especially. With the Supreme Court set to decide the Affordable Care Act’s fate this month, opponents are using every opportunity to aim at its moving parts. There’s so much misinformation circulating about the legislation in general, and unfortunately, some of it is even coming from people who claim to represent the interests of small business.
But I’m a real small business owner, and I can tell you that one of my biggest interests is maintaining a healthy bottom line. The Affordable Care Act is helping me do that. By spreading the word, I hope I can encourage even more entrepreneurs to find out if they’re eligible for the kind of relief I received. I’m a member of the advocacy group Small Business Majority, and I saw a January 2011 survey it commissioned that showed more than half of the 619 small business owners who responded had never even heard of the health-care tax credit. Considering this, along with efforts by some of the law’s opponents to discourage small employers from looking into its benefits, the lack of uptake being blown up in the media isn’t entirely surprising.
Again, I strongly encourage all my fellow small employers to look into the credit—or at least ask their accountants to. It’s not a waste of time. Take my word for it as an entrepreneur with more than three decades of experience who puts business before politics.