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Healthcare Reform Could Advance Small Businesses In Hawaii

Written by Jenna Weiner
Published: 3/31/2010

Small businesses in Hawaii could see a substantial boost from healthcare reform.

Tax credits from the healthcare reform bill could provide particularly good news for small businesses in Hawaii, the Honolulu Star-Bulletin reports.

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The new federal law exempts businesses from having to offer health insurance if they have fewer than 50 employees, and the tax credits are an incentive to provide it. This comes into play when businesses in the 48 contiguous states compete for talented workers, but the situation is different on Hawaii's islands.

The state's Prepaid Health Care Act of 1974 requires all companies to offer health insurance to full-time employees and pay part of the premium. This means that insurance isn't a factor when small businesses recruit employees.

Hawaii could see significant tax credits, since the U.S. Small Business Administration lists 97 percent of the state's employers as small businesses.

Companies which previously paid cash under the table to avoid offering insurance could also benefit.

"This will make it possible for more small businesses to become legit," tax service owner Rachel Nakooka told the paper. "One of the reasons many don't want to pay a payroll is because they don't want to pay insurance."

On the website HealthReform.gov, the U.S. government estimates that 14,000 small businesses in Hawaii could be helped by a small business tax credit making premiums more affordable.

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