What's Behind More Businesses Offering Insurance?

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Here in the United States, a new study shows that more small businesses are offering health-care coverage to employees. That's possibly because of a tax credit in the new health-care law.

John Sepulvado, of Capital Public Radio, reports.

JOHN SEPULVADO: A study by New York's Bernstein Research shows 60 percent of businesses with fewer than 10 employees are offering health insurance. That's an increase of nearly 14 percent, compared to last year. But if you've watched any cable news the past year and a half, there's a good chance you've seen either Dan Danner or William Dunkelberg warning about how the health-care overhaul could hurt small businesses. They appear a lot on behalf of the National Federation of Independent Business, or NFIB, a group opposing the law.

Mr. DAN DANNER (President, National Federation of Independent Business): The majority of our 350,000 members think this is a bad bill. It's going to make health care more expensive.

Mr. WILLIAM DUNKELBERG (Economist, National Federation of Independent Business): It certainly compromises the quality of care, and the cost of care, that we're going to see delivered to consumers out there.

SEPULVADO: But what this new study shows is that the health-care bill is working for the smallest of small businesses, according to John Arensmeyer. He's the CEO of the Small Business Majority, a national advocacy group based in California. He says the federal tax credits for health care are offsetting the costs for businesses.

Mr. JOHN ARENSMEYER (CEO, Small Business Majority): It's creating a tremendous incentive for small businesses to sign up for insurance because in 84 percent of the cases across the country, those businesses will have an opportunity to have at least part of the cost covered by the credit.

SEPULVADO: It's a different story for slightly larger businesses. The NFIB says those with more than 50 employees could be heavily penalized for not providing coverage. About 4 percent of all the U.S. companies could pay that fine, according to data compiled by the Small Business Administration.

For NPR News, I'm John Sepulvado in Sacramento.

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