There are solutions to the health insurance affordability crisis
Launching and growing a small business often is touted as a compelling way to achieve the American dream. The unaffordability of health insurance coverage, however, stacks the deck against small businesses.
Right now, there are too many small businesses unable to provide their employees’ with health insurance coverage. Entrepreneurs themselves also feel trapped under the weight of escalating premiums.
There are solutions to the health insurance crisis threatening the viability of some small businesses and stymying the growth of others. Because of the rhetoric and noise that dominate our current politics, these reforms can only be achieved through strong grass-roots advocacy.
We are thankful there are Illinois politicians who recognize how important affordable, quality health insurance is to the small business community. This is a crucial time for us to rally in support of their efforts because without meaningful change, health insurance will become even more unaffordable.
Health Reimbursement Arrangements
The SBAC recently traveled to Springfield for an engaging and impactful day of advocacy. While our agenda was robust, there was a significant focus on legislation that will provide tax incentives to small businesses that establish a Health Reimbursement Arrangement (HRA).
An HRA is an employer-funded health insurance benefit that reimburses employees for health insurance premiums and medical expenses. Employers can set a fixed monthly reimbursement allowance, and employees choose the coverage and care that works best for them. HRAs are tax-deductible for employers and tax-free for employees.
Senate Bill 3619 will provide a $400 tax credit per employee to small businesses that create an HRA for their employees. The following year these small businesses will receive a $200 tax credit per employee. Other states have adopted similar tax credits to spark the creation of HRAs, which have proven to be a valuable tool for small businesses that want to provide health benefits to their employees.
The good news is that there is bipartisan support for this legislation. You can visit the Illinois General Assembly website at https://ilga.gov/, search for SB3619 and view the Illinois senators co-sponsoring this legislation. If you see your state senator is a sponsor, please consider calling or emailing their office to thank them. In the event your state senator has not yet co-sponsored the bill, reaching out and asking them to sponsor will be extremely impactful.
Federal fixes
Federally, there is bipartisan legislation dubbed “The Patients Deserve Price Tags Act,” which will provide more transparency on health care costs so patients can compare prices and make better informed choices. We also strongly encourage Illinois’ Congressional leaders to support Association Health Plans (AHPs) because small businesses have been unable to procure affordable health insurance by themselves.
The small business community should have the opportunity to come together and through the power of critical mass, procure more affordable health insurance coverage. This should not be a partisan issue. Legislators from both sides of the aisle should make allowing AHPs an urgent priority.
Small businesses and entrepreneurs cannot withstand skyrocketing health insurance premiums year after year. This issue should be addressed head-on and there is no time to waste. Policymakers at all levels of government should fight to make health insurance and health care affordable for the small business community.
• Elliot Richardson is president and co-founder of the Small Business Advocacy Council.