The Treasury Department has released details on how small businesses will benefit from the new health insurance reform law.
Karen Mills, administrator of the Small Business Administration, said an estimated 4 million small businesses may qualify for a credit, which will provide about $40 billion in tax relief over the next 10 years.
Tax credits included in the healthcare reform law are just the beginning of ways the new legislation will help small businesses, she said.
"Rising healthcare costs have been the biggest concern for small businesses for decades," Mills said. "But as a result of the Affordable Care Act, we are already putting in motion steps that will reform the health insurance system so it works for small businesses, rather than strap them with continually rising costs."
The law will provide tax credits for small businesses of up to 35 percent of the employee premiums they pay starting this year. In addition, small businesses may receive state healthcare tax credits and still qualify for a federal tax credit, according to Mills. Dental and vision coverage will also qualify for tax credits, she added.
The law also provides that in 2014, the maximum tax credit will increase from 35 percent to 50 percent and small business owners will also have the chance to access affordable plans through health insurance exchanges. These exchanges will create a marketplace where small businesses can pool their risk and spread it more broadly while reducing administrative costs, Mills said.
The Affordable Care Act also will prohibit insurance companies from dramatically increasing premiums for a small business just because one worker gets sick, she said.
"By outlawing discrimination based on pre-existing conditions, the Affordable Care Act will make it easier for small businesses to compete for quality workers, as well as allow more Americans to break out of `job lock' and start their own business," Mills said.
House Speaker Nancy Pelosi (D-Calif.) said the law makes the benefits of health insurance reform a reality for more small businesses.
"They will ensure that our entrepreneurs and business owners – the engines of our economic growth – can take full advantage of measures to reduce costs and have every opportunity to create jobs, grow and thrive," Pelosi said.