NU Online News Service, Sept. 7, 4:02 p.m.EDT

Tax credits in the health care reform law designed to offsethealth insurance premium costs mean that small businesses will beone of the first groups to benefit from the legislation, accordingto a new report from the Commonwealth Fund.

There are other provisions in the legislation that will helpsmall businesses reduce the estimated 18 percent differentialbetween the cost of health insurance for small and large companies,the report said.

These include establishment of state-based insurance exchangesthat promise to lower administrative costs and pool risk morebroadly, and creation of new market rules and an essential benefitstandard to protect small firms and their workers, the reportsaid.

The Commonwealth Fund report projects that up to 16.6 millionworkers are in firms that would be eligible for the tax credit,starting this year through 2013.

And, the report says, over the next 10 years, small businessesand organizations could receive an estimated $40 billion in federalsupport through the premium credit program.

The report notes that small businesses have "historicallystruggled" to find adequate health insurance coverage.

On average, the report said, small firms pay up to 18 percentmore in premiums than large firms do for the same health insurancepolicy.

In these plans, a higher share of the premiums is used foradministration, marketing, insurance broker commissions,underwrit-ing and other overhead costs of the insurancecarrier.

In releasing the report, Commonwealth Fund President Karen Davissaid the new law "is a big step forward for small businesses andtheir employees."

She said, "Not only will business owners see immediate benefitsfrom the tax credits, but owners and employees alike will beprotected from steep premium increases and high out-of-pocketcosts, ensuring they will have access to the stable, secure healthinsurance they deserve."

Additional savings will be realized by 2020 through provisionsthat reduce insurers' administrative spending and increasecompetition among insurers participating in insurance exchanges,the report said.