WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) has introduced legislation to help small business owners who want to provide health insurance to their workers. The Small Business Tax Credit Accessibility Act would expand and simplify the Affordable Care Act’s small business tax credit, making it available to more employers and for a longer period of time.

“The ACA has helped millions of Americans, including thousands in Maine, access high-quality, affordable healthcare,” Senator King said. “And the small business tax credit that assists business owners in offering insurance to their employees is an important provision of the law. But as studies have shown, Congress can adjust the credit to make it more effective. By expanding the credit and simplifying the process, like our bill does, we can further enhance the positive effects of the health care law and allow more people to access coverage through their employers.”

A May 2012 study conducted by the Government Accounting Office (GAO) determined that fewer small employers claimed the tax credit than were thought to be eligible because of credit size and administrative complexity.

As a result, the Small Business Tax Credit Accessibility Act would:

• Raise the maximum size of businesses that are eligible to receive the credit from 25 employees to 50 employees
• Extend the credit to businesses with higher average wages. Currently, only businesses with an average wage below $50,000 can qualify for the credit. This bill would raise the maximum average wage to 330 percent of the federal poverty line for a family of four ($80,025 in 2015).
• Increase the threshold for a firm to receive the maximum credit from 10 to 20 full-time employees
• Modify the phase-out of the credit to ensure that any business that meets the full-time employee and average wage thresholds will qualify for a tax credit of some magnitude
• Increase the number of years for which a small business may receive the credit to three consecutive years
• Eliminate the requirement that employers claiming the credit contribute the same percentage of the cost for each employee’s health insurance
• Simplify calculations by eliminating the cap that limits eligible employer contributions to average premiums in the state

The legislation was sponsored by Senators Chris Coons (D-Del.) and Jeff Merkley (D-Oreg.) and cosponsored by Senators King, Heidi Heitkamp (D-N.D.), Mazie Hirono (D-Hawaii), Tim Kaine (D-Va.), Joe Manchin (D-W.V.), and Jeanne Shaheen (D-N.H.). The full text of the bill is available HERE.

The bill has been endorsed by the Association for Enterprise Opportunity, Association of Women’s Business Centers, Families USA, Main Street Alliance, National Association of Health Underwriters, National Association of Insurance and Financial Advisors, National Grocers Association, National Retail Federation, Small Business Majority, Third Way, U.S. Black Chambers Inc., and Women Impacting Public Policy.

According to the U.S. Department of Health and Human Services, more than 64,000 people in Maine – and approximately 7.5 million across the country – have selected a health care plan or were automatically re-enrolled through the HealthCare.gov platform since open enrollment began on November 15, 2014.

###