Report: 71.5% of Iowa small businesses to be eligible for health care tax credit

By the numbers:

Number of small businesses in Iowa: 57,440

Number of small businesses eligible for the tax credit: 41,090

Average expected credit per workers: $744

Average credit in firms qualifying at maximum level: $1,017

Source: FamiliesUSA/The Lewin Group

A new report says that 71.5 percent of Iowa's small businesses will be eligible for health care tax credits under the health care reform law, slightly above the national average.

The report released Monday by FamiliesUSA attempts to call attention to one of the more widely overlooked facets of the Affodable Care Act that has been dubbed "Obamacare" by its critics. The tax credits are to help businesses that provide health insurance benefits to cover premium costs. Small businesses have traditionally faced highher administrative costs in providing coverage than large businesses, the report said.

To qualify for the credit, small businesses must cover at least 50 percent of each employee's health insurance premiums.

The size of the credit will increase in 2014 to cover up to 50 percent of the cost of health insurance provided to workers.

The heated political debate over the Affordable Care Act has made it difficult to effectively inform small business owners about the tax credit.

"While the potential reach of this new tax credit is great, educating the small business community about it remains a challenge," the report said.

Out of 57,440 small businesses in Iowa, about 41,090 would be eligible for the tax credits, the report said, and 16,070 or 39.1 percent would be eligible for the maximum 35 percent credit.

About 190,500 Iowans work for the companies that would be eligible for the credits, and the average credit per worker would be $744. The average credit per worker in firms qualifying for the maximum credit would be $1,017.

The report said the average credit per worker nationwide would be $66 per employee higher than in Iowa, or $800. The average credit would be $1,066 in firmst eligible to receive the maximum.

The percentage of Iowa companies eligible for the credit is slightly above the national average estimated at 70.1 percent of small businesses.

For purposes of the study, "small business" was defined as firms with fewer than 25 full-time employees.

FamiliesUSA, based in Washington, D.C., is a nonprofit group dating back to 1981 that works toward high-quality affordable health care.