HARRISBURG, PA — Pennsylvania lawmakers are advancing a proposal that would give small businesses a new state tax credit for helping employees pay for health insurance, an effort supporters say could expand coverage as more residents lose access to affordable plans.
What This Means for You
- Small businesses could receive state tax credits for contributing to employee health insurance costs.
- The proposal targets businesses with fewer than 50 employees.
- Supporters say the bill responds to rising uninsured rates after enhanced Affordable Care Act subsidies expired.
The Pennsylvania House Finance Committee held a public hearing Wednesday on House Bill 2550, legislation that would create a tax credit program for small employers contributing toward workers’ health insurance premiums.
Premiums are the monthly payments individuals or employers make to maintain health insurance coverage.
Supporters of the proposal argued the legislation is needed after enhanced federal premium tax credits under the Affordable Care Act expired at the end of 2025, increasing insurance costs for many consumers.
Steve Samuelson, chair of the House Finance Committee and a co-prime sponsor of the bill, said many smaller employers struggle to provide traditional group health insurance coverage.
“Too many working Pennsylvanians are foregoing health insurance if they can’t access it through their employer,” Samuelson said. “This effort would incentivize small business owners to help their employees by allowing them to claim a tax credit for their contributions.”
How the Proposal Would Work
Under House Bill 2550, tax credits would only apply to health insurance plans purchased through Pennie, Pennsylvania’s state-run health insurance exchange established under the Affordable Care Act.
The legislation would apply to businesses with fewer than 50 employees and subject to Pennsylvania personal income tax requirements.
Employers participating in the program would also be required to contribute equally toward eligible employee health insurance costs.
A health insurance exchange is an online marketplace where individuals and businesses can compare and purchase regulated insurance plans.
Jen Mazzocco, another co-prime sponsor of the bill, argued Pennsylvania may need to act independently as federal healthcare policy uncertainty continues.
“With no federal solution in sight, we need to act now at the state level and fill the gaps left by catastrophic ACA cuts,” Mazzocco said.
Concerns About Rising Uninsured Rates
Arvind Venkat, a practicing emergency physician and co-prime sponsor of the bill, testified that uninsured rates are rising while many small businesses remain unable to offer affordable coverage.
“With actions at the federal level making it increasingly difficult for Pennsylvania families to afford quality health insurance, we need creative solutions to ensure people are protected,” Venkat said.
Venkat added the tax credit could help smaller employers compete for workers by offering stronger benefits packages while lowering their state tax liability.
Outside Testimony and Next Steps
The committee also heard testimony from Alex Halper and David Anderson regarding how other states are addressing uninsured workers and balancing healthcare affordability with the financial realities facing small businesses.
Samuelson indicated the legislation could receive a committee vote as early as June.
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