OR: Small Businesses Have Mixed Reaction to Governor’s Tax-Credit Offer

Jan Meekcoms

Jan Meekcoms

Oregon Governor John Kitzhaber’s office announced in late March that qualifying small businesses can receive a tax credit for purchasing qualified health plans (QHPs) directly from an insurance company, but it’s not clear yet how many small businesses will take advantage of the offer.

Jan Meekcoms, state director of Oregon’s National Federation of Independent Business (NFIB) chapter, said the tax credit will help small businesses but isn’t “the ideal thing we were all hoping for.”

Meekcoms said very few of the chapter’s 7,500 member businesses qualify for the credit because their employees’ incomes are too high. But “for those members that can [qualify], it’s a very good thing.”

Courtney Helstein, health care outreach coordinator for the Main Street Alliance of Oregon, said enrolling in QHPs is more complicated for small businesses than it would be if Cover Oregon’s small business exchange were functioning.

Although Cover Oregon has developed a hybrid paper-online process to enroll Oregonians in individual policies, the exchange has taken no such steps to facilitate enrollment in small-group policies and decided to scrap enrolling small businesses altogether.“Some folks in the small business community were feeling a little bit like they were forgotten,” Helstein said.  “No one was telling them when they would have any option at all.”

But starting this month, businesses with fewer than 50 full-time employees that purchase a QHP directly from an insurer can apply for the tax credit when filing their federal taxes for 2014.

Cover Oregon will notify businesses that they’re eligible to receive a tax credit, but the IRS determines eligibility. 

The Mainstreet Alliance was involved in crafting the solution, which Helstein said is not ideal. “But overall it’s a good thing,” she said.

Some business owners still didn’t know they could qualify for a tax credit, and one of the biggest challenges will simply be communicating to small businesses about the change, Helstein said.

An issue that remains unresolved is whether small businesses that already bought a non-QHP because they couldn’t enroll through Cover Oregon will be allowed to get the tax credit.  “It would only be fair,” Helstein said.