Side Effects: Small Businesses Won’t Find a Friend in Obamacare

Kathryn Nix / July 30, 2010

One of the promises of Obamacare was that it would give folks working in small businesses access to affordable care. Unfortunately, like so much else in the law, it doesn’t look like that’s going to work very well.

To solve the problems small firms have with finding affordable health coverage, Obamacare created a small-business tax credit.  But there’s less to this credit than meets the eye.

A recent study by FamiliesUSA shows that only one in four businesses employing 25 or fewer employees will get the full credit—and one in six will receive absolutely nothing.  Moreover, the credit is reduced whenever a firm adds workers or raises wages—so it actually provides as a perverse incentive not to hire or give raises.

The bottom line, according to Dr. Bob Graboyes, senior healthcare advisor for the National Federation of Independent Businesses:  the credit will do little to help small business. (more…)