Businesses Fret About Penalties, Seek Opportunities In Health Reform

Some small businesses may get financial help as part of the health overhaul that could cover up to 35 percent of business's premium costs for insuring employees in the form of new tax credits, Kaiser Health News explains in a consumer column. "But the tax credit comes with several strings, and not everyone thinks it will do enough. … Between 1.8 million and 4 million businesses are estimated to be eligible for the credit. Companies have to pay at least 50 percent of the premiums for their employees' health insurance to qualify. Nonprofit enterprises are eligible for tax credits of up to 25 percent" (Andrews, 6/1).

The Boston Globe notes that small businesses employing family members will not see those advantages. The health law "says family-owned businesses are not allowed to count employees who are also family members toward the credit, which is retroactive to January" (Lazar, 5/30). 

Oregon and Washington state farmers "are nervous about the federal health reform law passed in March. It requires employers with 50 or more full-time equivalent workers to provide health coverage starting in 2014 or pay a $2,000 penalty per employee," The Oregonian reports. Nearly all farms and orchards don't offer insurance to seasonal workers -- and many don't offer it to their full time employees either. Most growers are too small to suffer from the mandate. But, larger farmers could face it, depending on how the government implements the law (Meyer, 5/29).

Meanwhile, biotech firms are anticipating new opportunities because of the health law, the San Diego Business Journal reports. Grants will provide up to $5 million to help cover research and development costs. "Signed into law with the rest of the health care reform package was a $1 billion therapeutic discovery tax credit aimed at biomedical research projects that show potential in advancing life-saving treatments for unmet medical needs, including cancer, and in lowering the long-term costs of health care and supporting jobs" (Chambers, 5/31).

The Oklahoman adds: "Oklahoma's fledgling biotechnology firms are hopeful they'll get a piece of $1 billion in funding, which was tucked into the health care reform bill to help small companies speed development of lifesaving therapies. Altheus Therapeutics Inc. and Selexys Pharmaceuticals Corp. among others plan to apply for the up to $5 million boosts — which will come in the form of tax credits on up to 50 percent of their qualifying investment costs in 2009 and 2010. For firms without enough taxable income, the U.S. Treasury will exchange credits for grants of equal dollars" (Burkes, 5/30).

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