Reopening the Government Without Extending ACA Tax Credits is a Devastating Blow to Small Businesses

“An agreement that would reopen the federal government without renewing the Affordable Care Act’s enhanced premium tax credits (EPTCs) deals a huge blow to the fortunes of small businesses in America.

With many small businesses already struggling under the weight of tariffs, cuts to federal assistance programs, rising inflation and declining consumer confidence, the loss of the EPTCs could be the final blow for many entrepreneurs. Without the EPTCs, KFF estimates that ACA marketplace enrollees will pay 114% more on average for their monthly healthcare premiums. Since more than half of all ACA Marketplace enrollees are small business owners, self-employed entrepreneurs or small business employees, that astronomical increase would force a significant percentage of small business owners to reduce their health coverage or drop insurance entirely. If those decisions are made, a large percentage of small business owners will be forced to close their businesses and go work for someone else because they cannot afford access to health insurance on their own. And many small business employees on the exchange may seek out employers that can afford to offer group coverage. Even small businesses that choose to continue coverage despite skyrocketing costs will face ill effects as they will have less money available to invest in their businesses. Given how important continuing this essential tax credit is for small businesses, it’s no surprise that Small Business Majority’s research found 74% of small business owners support its extension.

Even though the U.S. Senate says it will consider continuing the EPTCs next month, that does nothing to ease the pain for America’s entrepreneurs. With open enrollment already underway, small business owners and their employees are now forced to decide whether to purchase health insurance for next year. Many are already feeling sticker shock, and continued uncertainty over the future of EPTCs will not make their decisions any easier. Even if Congress holds a vote in December on the fate of the EPTCs, that will come too late for many small businesses as open enrollment ends on Dec. 15 in many states. 

Although the federal government shutdown has caused short-term pain for small businesses, reopening the government without guaranteeing that the EPTCs will be available next year and beyond will cause far more than pain – it will mean the loss of jobs and the shuttering of businesses. The continued failure of lawmakers to understand the connection between access to quality, affordable health insurance and the maintenance of a thriving small business economy has dire consequences, and those consequences will be felt when a whole generation of entrepreneurs closes up shop. We implore policymakers to rescue small businesses from closure by extending the EPTCs.”