Zach Hoffman was confident his small business would qualify for a new tax cut in President Barack Obama’s health care overhaul law.But when he ran the numbers, Hoffman discovered that his office furniture company wouldn’t get any assistance with the $79,200 it pays annually in premiums for its 24 employees. “It leaves you with this feeling of a bait-and-switch,” he said.
When the administration unveiled the small business tax credit earlier this week, officials touted its “broad eligibility” for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage. Hoffman’s workers earn an average of $35,000 a year, which makes it all the more difficult to understand why his company didn’t qualify.
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Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages.
It’s an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help—people with health problems, families with young adult children and small businesses. Because of the law’s complexity, not everyone in a broadly similar situation will benefit.
Consider small businesses: “The idea here is to target the credits to a relatively low number of firms, those who are low-wage and really quite small,” said economist Linda Blumberg of the Urban Institute public policy center.
Read More: AP