This is from Dr. Bob Graboyes, NFIB Senior Healthcare Advisor:
Firms that qualify for the credit ought to take it, but most who do will be firms who were going to offer coverage anyway. … People who use NFIB’s online tax credit calculator tend to say, “I didn’t know the credits were so small.” At most, a credit offsets 35% of the business’s portion of the insurance premium. But that maximum only applies to firms (and not all firms) with 10 or fewer employees whose average wages are no more than $25,000 per year…. Plus, there are at least eight other factors that can make the credit less valuable than that 35%.
So the government is going to give away money (our money) that it didn’t have to give away?
Sounds like a Rube Goldberg tax credit to match the Rube Goldberg nature of the entire bill.
Bootom line: this subsidy is going to do almost nothing to increase the number of people with health insurance.
I’ve performed calculations from a variety of scenarios. Only very small firms, with exceedingly low wages, will qualify for the subsidy — which is too low to provide any real incentive for firms to offer coverage.
Employees with incomes that low, working in firms that small, would be far better off obtaining a subsidy in the Exchange — which is precisely what will happen once the Exchanges open in 2014. Of the 4 million eligible firms, I suspect the subsidy is so low that most eligible firms will not find it worth the effort to jump through all the hoops required to obtain the credit.
I think they just want to be able to say they are doing something without spending very much money.