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Small Businesses and the Self-Employed
Small Businesses and the Self-Employed
We are an economy that relies heavily on entrepreneurs and small businesses-more than 25 million Americans own a small business. But since small businesses and the self-employed aren't able to purchase insurance as cheaply as large corporations, rising health costs are making it increasingly difficult for them to afford basic health coverage for their employees and their families.
Fact: There are more than 25.4 million Americans who own a small business, 9.9 million of whom are primarily self-employed.1
Fact: It was not unusual for small business to experience rate increases in excess of 20 percent in 2002.2
Fact: 41.7 percent of small businesses in Washington do not offer health insurance.3
Fact: 96 percent of businesses in Washington are classified as small businesses.4
What can we do about it?
Create a state-wide purchasing pool for small businesses to reduce insurance costs
For example, states can implement something similar to Maine's Small Business Health Coverage Plan. This plan would create a public-private partnership to provide lower cost health insurance to workers employed by Maine's small businesses and the self-employed. The Plan creates an appointed board which will request proposals from insurance carriers and the State's own Department of Human Services to develop and administer a state-wide insurance plan for small businesses. Costs are controlled by maximizing its use of federal funds for low-wage workers and by capping insurance company profits.
Allow Small Businesses to enroll their workers in the Federal Employees Health Benefits Program (FEHBP)
FEHBP currently provides health insurance to 9 million people across the country through 180 plans. This concept would allow small businesses that did not previously offer health insurance to benefit from the negotiating power of the federal government and access local FEHBP plans at the same rates as federal workers. This could be coupled with a tax credit to make it more affordable for small business owners.
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