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How to Help Small Business Owners Afford Health Care



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Alma Beltran owns a successful small business, but that doesn’t mean she can afford health care for herself and her family.

Mark Herbert
Special to CALmatters

In fact, the Chula Vista entrepreneur, who is president of Graphic Image Label Inc., is facing a hard choice between the health of her loved ones and the health of her business. It’s because the size of her household shrank after one of her children went to college.
“Since I no longer qualify for federal assistance, my health care premium costs six times as much as it did before,” Alma said in a March phone conversation with Small Business Majority staff.
“So far this year I have not been able to afford paying my premium. I must now decide between going without insurance and keeping my business, or closing my business so I can find a job with health coverage.”
The Affordable Care Act (ACA) is the first meaningful health care reform that helped address the needs of small businesses, their employees and the self-employed. But we cannot overlook the fact that nearly 3 million Californians still do not have insurance.
Of those who are uninsured, roughly 324,000 are solo entrepreneurs and 44% work at a small business.
Alma and business owners like her who do have insurance are struggling to pay their premiums and sustain their businesses.
Fortunately, they will get some relief thanks to a provision in California’s 2019-2020 budget.

A Change That’s Critical for Many Entrepreneurs

Consumers, who do not qualify for federal premium subsidies, will get additional assistance through a state tax credit. It will apply to people who are between 400-600% of the federal poverty level.
This change is critical for many entrepreneurs. The median income of an incorporated small business is about $57,000, but the cutoff for health care subsidies was about $50,000.
While this is an important first step, much more can and should be done to address this issue. Specific proposals small businesses support include:

  • Providing additional assistance to those making close to 600% of federal poverty level. Once the new premium assistance included in the budget is implemented, it is still likely that individuals earning close to $72,840 may spend close to 18% of their income, or about $13,000, on health care premiums. In order to make insurance more affordable for middle income business owners, we recommend limiting the out-of-pocket max to 10% of income spent on premiums.
  • Passing Assembly Bill 824 by Assemblyman Jim Wood, Democrat from Healdsburg. The bill would prohibit agreements in which drug manufacturers pay generic companies to delay the introduction of lower-price medications to the market. This measure would help ensure small business owners have access to affordable, quality health care options. 

As beneficial as the Affordable Care Act has been to California’s small firms and solo entrepreneurs, we cannot ignore the fact that millions of Californians still do not have insurance.
The only way to ensure small business owners, their employees and the self-employed have access to the affordable coverage that is necessary for their success is by making quality, affordable health care available to everyone.
About the Author 
Mark Herbert of Concord, Small Business Majority’s California director, can be reached at He wrote this commentary for CalMatters, a public interest journalism venture committed to explaining how California’s Capitol works and why it matters. Read his past commentary for CalMatters.