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Since the signing of the Affordable Care Act (ACA) in 2010, healthcare coverage has expanded to millions of Americans, including small business owners, their employees, and families. With a record 21.3 million Americans currently covered through the ACA Health Insurance Marketplace, entrepreneurs are benefitting in various ways. One major advantage is the freedom to pursue entrepreneurship without the worry of losing healthcare coverage from an employer. Individuals can now find affordable plans on HealthCare.gov to start their own business knowing they will be covered, regardless of pre-existing conditions or lifetime limits on coverage.

Moreover, small business owners now have diverse coverage options through the Small Business Health Options Program (SHOP), allowing them to offer healthcare benefits to their employees and compete with larger businesses in recruiting talent. This has leveled the playing field for small businesses and startups, making them more competitive in the job market. Additionally, the American Rescue Plan expanded ACA tax credits to offset health insurance premium costs for millions of Americans, making coverage on the Marketplace more affordable. Thanks to the Inflation Reduction Act, four out of five HealthCare.gov customers were able to find coverage for $10 or less per month for the plan year of 2024 after subsidies.

In 2022, President Biden addressed the “family glitch” loophole in the ACA through an Executive Order, ensuring that more family members of employees who receive insurance through their employer are eligible for financial assistance in purchasing coverage through the ACA Marketplaces. This fix has resulted in more individuals qualifying for premium tax credits to purchase affordable, high-quality coverage. Overall, small business owners and self-employed individuals constitute a significant portion of Marketplace enrollment among working-age adults, with 25 percent of enrollees falling into these categories.

The last three years have witnessed a surge in new small businesses, potentially influenced by the freedom and security provided by the ACA. Prior to the ACA, concerns over losing healthcare coverage discouraged many individuals from starting their own businesses. Now, with access to the Health Insurance Marketplace and expanded tax credits, entrepreneurs have greater confidence in pursuing their entrepreneurial dreams and providing healthcare benefits to their employees. The ACA has undoubtedly had a positive impact on small businesses, allowing them to thrive in an increasingly competitive market.

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