Health Reform Law Will Require Self-Employed To Purchase Less Flexible, More Expensive Coverage

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Health Reform Law Will Require Self-Employed To Purchase Less Flexible, More Expensive Coverage

For Immediate Release: Contact:  Kristin Oberlander
(202) 466-2100
Twitter: NASEtweets

NASE Participates In Joint CAHC, U.S. Chamber Event On Controlling Health Costs

Washington, D.C., July 13, 2011 – In less than two and a half years, the vast majority of the self-employed and micro-businesses (fewer than ten employees) will be required by law to purchase health coverage that will likely be more expensive and less flexible than their current plan.

NASE Senior Health Policy Advisor Mike Beene said that the Affordable Care Act will cause ninety-five percent of the small business population to purchase such health coverage. Most importantly, he said, these businesses will not receive any financial assistance to help them pay for this mandated coverage. The costs of implementing these changes could discourage business growth including expansion and hiring, according to a study by the Coalition for Affordable Health Coverage (of which the NASE is a part).

Joel White, Executive Director of CAHC, remarked that “absent cost reduction strategies, if employees respond to the new federal mandate to purchase insurance by enrolling in their employer health plans, many workers will be too expensive to hire or retain. If employers respond by terminating or significantly curtailing those health plans, then federal spending projections could be low by a trillion dollars.” 

A 2008 NASE study showed that only 18 percent of micro-businesses are currently providing health coverage for their workers, a significant decline from 46% in 2005.  The key contributor to the drop in employer-based coverage in this micro-employer market was cost.  This issue will be exacerbated with the new essential health benefits requirements, minimal cost relief and mandates in the health reform law.

“Many of the self-employed fall just short of qualifying standards for subsidies and tax credits in the health reform law,” commented Beene. “They make too much to qualify for premium assistance but too little to afford the comprehensive coverage they will be required by law to buy.”

For example, the Small Business Health Tax Credit excludes the self-employed, defined as a one-person business. The self-employed can qualify for premium subsidies for individuals and families once they take effect in 2014. To qualify, an individual must make below $43,340 and a family of four must have a household income below $88,200. The average household income for an NASE self-employed member is $62,500 for self and spouse which pushes them out of qualifying range for premium assistance. 

To learn more, visit NASE’s SelfMade blog.

About the NASE
The National Association for the Self-Employed (NASE) is the nation's leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association's website at

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