GAO Report Backs NFIB Research on Small-Business Health Insurance Tax Credit

From the ICYMI files from last week…

WASHINGTON, D.C., May 23, 2012 — A recently released report by the Government Accountability Office (GAO) has reaffirmed the National Federation of Independent Business (NFIB) Research Foundation’s own findings regarding the Patient Protection and Affordable Care Act (PPACA) small business health insurance tax credit’s impact on the ability of small businesses to offer health insurance coverage.   NFIB’s research concluded that eligibility requirements, tax complexity and expiration all act as a disincentive to begin offering coverage by employers.

“The GAO report backs up what NFIB has been telling Congress about this tax credit from the beginning,” said Amanda Austin, Director of Federal Public Policy for NFIB.  “PPACA proponents have made great claims about the tax credit’s ability to increase coverage for employees of small-business owners; they use this as the one shining beacon in a bad law.  Unfortunately, the truth is that this credit does not incentivize those small employers not already offering coverage to begin doing so.  Fuzzy estimates about the number of eligible business owners, the temporary nature of the credit and the increasingly high cost of providing health insurance all make this tax credit a mere talking point, not an incentive for action.”

A July 2011 NFIB Research Foundation survey, Small Business and Health Insurance: One Year After Enactment of PPACA, concluded that the high cost of health insurance remains a top problem for small employers and will likely remain so for a long time.  However, PPACA’s extraordinarily complex small-business tax credit offered little incentive to purchase health insurance for small firms currently not offering coverage.  Instead, it serves almost exclusively as a windfall for small businesses who currently offer coverage to employees.

The May 2012 Government Accountability Office report, Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity, found that most small employers do not commonly offer insurance and that small employers likely do not view the credit as a big enough incentive to begin offering health insurance and to make a credit claim. Further, the report states that the Small Employer Health Insurance Tax Credit was intended to offer an incentive for small, low-wage employers to provide health insurance, however, utilization of the credit has been lower than expected, with the available evidence suggesting that the design of the credit is a large part of the reason why.

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About Mike Durant

Mike Durant was named New York State Director of NFIB in May 2011. Prior to joining NFIB as the Assistant State Director in May 2010, Durant began his career in the New York Senate working in the Office of Member Services. From there, he served in a number of positions during former New York Governor George E. Pataki’s administration. As a Research Specialist in the New York State Office of Demographic Policy, Mike was responsible for drafting a redistricting proposal for Governor Pataki. In addition, Mike served as a Research Specialist for the Empire State Development Corporation, as well as the Associate Commissioner of Human Resource Management with the New York Department of Labor. Durant also spent four years working at the Questar III BOCES as a specialist focusing on the complex formulas that drive aid to school districts across the state while also taking a lead role in the state legislative/budget process as it related to education policy. These past positions have given Mike a deep understanding of the complex political economics of the State of New York. Active in the community, Durant has served on a number of boards in both the village of Ballston Spa and Town of Milton. Durant received his bachelor’s degree from Siena College in Loudonville, New York and resides in Ballston Spa with his wife and two children.
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