Gordon Webster, Jr.

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BLOG: GAO report reveals health credit flaws

The Government Accountability Office (GAO) recently released a report 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. The research concluded that eligibility requirements, tax complexity and expiration all act as a disincentive to begin offering coverage by employers.

The 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.

The truth is that this credit does not encourage those small employers not already offering coverage to begin doing so. Fuzzy numbers about eligible business owners, the temporary nature of the credit and the increasingly high cost of providing health insurance all mark this tax credit a mere talking point, not an incentive for action.

The GAO 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.