One payoff to pass Obamacare not paying off

Many businesses cannot take advantage of the tax credit to reduce their cost of providing health insurance.

Business Week reports:

Eager to promote the new small-business tax credit, the government this spring mailed 4 million eligible companies postcards with highlights of the program. The response has been tepid, according to insurance brokers who sell small-group policies. The reason, they argue, is that the credit starts to phase out for companies that pay average annual wages of more than $25,000 or employ more than 25 workers. The value of the benefit declines quickly, so many business owners in high-cost states get no tax break, and those elsewhere often say the credit is too small to make much of a difference. Sales of health plans have gotten "very little traction so far," says James Stenger, director of business development for BenefitMall, which sells small-group plans in New Jersey.

Stenger says most of his clients pay their workers more than $25,000 a year, so the average tax credit he's seeing for the few who qualify is about 10 percent of the cost of the policy. That's less than $200 per worker-not enough to spur many business owners to start providing coverage.

The legislation "is just not doing what we had hoped," says Steven Selinsky, the incoming president of the National Association of Health Underwriters.

Imagine that - an Obama promise (or bribe, or "deal") not being fulfilled.

The legislation "is just not doing what we had hoped". Hopefully, the epitaph for Obamacare.