University Tennessee

University Tennessee

Tennessee Health Insurance, Healthcare Reform And The Economy

The Affordable Care Act that passed with healthcare reform provides tax credits for as many as 66,000 small businesses in the state of Tennessee. Nearly half of these companies are not protecting their employees with Tennessee health insurance. These tax credits are important to nine out of ten of Tennessee's small business owners who saw an increase in their company's total health care coverage for the previous year.

Increases in healthcare costs hit Tennessee employees, as well. More than three in five workers in Tennessee paid up to 15 percent more for health insurance in Tennessee last year. A third of employees switched to plans with higher deductibles in exchange for lower premiums.

Can reforming the healthcare industry help Tennessee small businesses and their employees? Sixty-one percent of small business owners surveyed in July 2009 said that it would. This survey was conducted by the Tennessee Small Business Coalition and the Peabody College Center for Community Studies of Vanderbilt University.

What Will Health Insurance In Tennessee Offer Small Businesses?

Small businesses, which employ approximately 16.6 million Tennessee residents, will be eligible for tax credits through the Affordable Care Act. That's particularly important because small businesses typically pay higher health insurance premiums than large firms. Tax credits to offset the higher cost of health insurance for small businesses became available in 2010 and that's just the beginning.

As many as 3.4 million workers in Tennessee may be able to benefit from the tax credits by 2013, and the Congressional Budget Office estimates that tax credits could provide up to $40 billion to subsidize health insurance premiums for small businesses in the coming decade.

Savings are expected to increase by 2020 from efforts to cut administrative costs and increased competition among insurance companies through the health insurance exchanges.

More Affordable Health Insurance in Tennessee Helps Small Businesses

Tax credits are just the beginning of healthcare reform when it comes to helping small businesses cover their employees with health insurance. Beginning in 2010, health insurance companies are required to monitor their spending for administrative costs as well as their profits. By 2011, administrative costs on plans for individuals and small businesses are not to exceed 20 percent of the premiums a company collects. Plan members are to receive a rebate whenever companies violate that rule.

In 2014, small businesses will also have access to state health insurance exchanges. By pooling members, these exchanges can offer lower premium costs making healthcare more affordable. Health insurance plans from the exchanges will limit out-of-pocket costs to $5,950 for individuals and to $11,900 for families. Individual plan deductibles will be limited to $2,000 and the maximum deductible for family plans may not exceed $4,000.

Tennessee Health Insurance Exchanges Can Increase Access To Healthcare

Employees of small businesses comprise one of the main categories of people who have no access to healthcare. Since 2005, employee premiums have risen by 47 percent, but wages only increased by 18 percent at the same time that inflation climbed 12 percent.

If you work for a small business that does not provide health insurance, you'll be able to buy directly from a health insurance exchange in 2014. Families with four members living on incomes up to $88,000 will also have access to subsidies that can help to cover the price of premiums. By that time, insurance companies will no longer be allowed to deny coverage to you if you have an existing health problem.

About the Author

By Wiley Long - President, eTNHealthinsurance.com - Tennessee's leading independent online health insurance agency specializing in individual and family
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