The war of words over health reform is increasingly focused on how the legislation will impact small business and employment. The day before the House voted—in a meaningless act of political theater—to repeal the “job-killing” health law, the White House hastily organized a conference call for reporters to speak with Karen Mills, administrator of the Small Business Administration and acting Deputy Commerce Secretary Rebecca Blank. During the call, the goal of which was to highlight how a repeal of health reform would negatively impact U.S. businesses, Mills announced that there’s already been a rise in the number of small businesses offering health coverage to their employees thanks to a new tax credit and other provisions of the law.

As evidence, Mills cited a survey conducted by the Kaiser Family Foundation that found that 59% of firms with three to nine employees offered health benefits in 2010, up from 46% the year before—a rise of 13%.

This claim was quickly challenged. In his column, The Fact Checker at the Washington Post, Glenn Kessler notes that Gary Claxton, who oversees Kaiser’s annual survey of employer health plans, says that although there was an increase in the portion of small businesses that provided employees with benefits, “certainly we have not tried to say it was because of the ACA," (the Affordable Care Act). Claxton adds that it wasn’t clear what led to this increase, but the Kaiser survey posits that the current economic slump led to more small businesses shutting down and the ones that remain are more likely to offer insurance to their employees. "We were just guessing, obviously," Claxton told the Post, but he said he thought that most small firms—who were surveyed in the few weeks just after the bill passed—would not have enough information about tax credits and other aspects of the legislation to proactively begin offering benefits.

Although the Post’s Fact Checker gave Mills’ claim three “Pinocchio’s”  (indicating “significant factual error and/or obvious contradictions”), there is growing evidence that the administration wasn’t wrong in suggesting that there is growth in the number of small businesses either considering offering health benefits to their employees or actually signing up for plans. In fact, despite the protestations from the U.S. Chamber of Commerce that the ACA will lead to layoffs and the demise of small businesses, a report released this past July by advocacy groups Families USA and the Small Business Majority found that the law actually contains many provisions that will help small business and make health coverage finally affordable to those with the fewest employees.

The basic provisions of the law are these: As of March 2010, businesses with fewer than 25 employees with moderate-to-low pay scales can earn tax credits for up to 35 percent of what they pay in health insurance premiums. From 2014 on, the maximum credit will increase to 50 percent. However, coverage will have to be purchased through one of the new state-based health insurance exchanges.

Last week, Health Affairs published a brief focusing on the small business tax credit and pointed out that “the federal government has notified 4 million companies [almost 84% of all small businesses in the country] that they may be eligible for the credit.” The brief also notes that the Congressional Budget Office estimates that the tax credits will reduce tax payments for small employers by $40 billion over the 10 years between 2010 and 2019. Research produced at MIT for the Commonwealth Fund estimates that some 16.6 million employees work at such eligible companies—although it may be that the initial relatively moderate tax credits for many businesses will “incentivize” just 1 in 5 eligible firms to offer insurance in the next couple of years.

Also starting in 2014, insurers will not be able to charge small business owners higher rates to cover employees with pre-existing conditions or for their female workers. The bill also prohibits lifetime benefit caps and recissions, as well as annual limits on medical costs. Despite expanding benefits, costs will be kept down because insurers will be limited on how much they can raise premiums and how much of the total premiums collected they must spent on medical care.

By 2014, states are also required to establish Small Business Health Options Program (SHOP) exchanges that help companies with fewer than 100 employees purchase health insurance. In some states, the SHOP exchanges will be combined with the exchanges created for individuals buying insurance. This adds up to a far larger “pool” of beneficiaries that spreads risk around and can mean lower rates for all.

One bit of misinformation, coming from reform opponents like the Chamber of Commerce is the charge that small businesses will face crushing financial burdens if they decide to not offer health benefits to their employees. In reality, only employers with more than 50 employees will face such penalties and they will only have to pay a fine if one of those employees qualifies for a federal subsidy to purchase insurance through state health insurance exchanges. In that case, the employer will pay a $2,000 fine per employee—although the first 30 employees will be subtracted from this calculation.

What’s often ignored in the rhetoric is that most businesses with more than 50 employees already provide insurance. According to the Families USA/Small Business Majority report “in 2009, less than half (46 percent) of businesses that employed three to nine workers offered coverage to their employees. Among small businesses with 10 to 24 workers, the offer rate increased to 72 percent, while almost all businesses with 50 or more workers (more than 95 percent) offered coverage to their employees.” From these statistics it’s pretty hard to justify the charge that penalties will lead to mass bankruptcy for small businesses.

Meanwhile, anecdotal evidence backs up SBA’s Karen Mills’ point that more small businesses are starting to insure their workers. A recent article in the Los Angeles Times details how, “Blue Cross Blue Shield of Kansas City, the largest insurer in the Kansas City, Mo., area, is reporting a 58% jump in the number of small businesses buying insurance since April, the first full month after the legislation was signed into law.” The article notes several other positive signs, including reports that in the six months after the ACA was signed into law, “UnitedHealth Group Inc, the country's largest insurer, added 75,000 new customers who work for companies with fewer than 50 employees.”

The California Employer Health Benefits Survey—which includes businesses only from that state—was (like Kaiser’s survey) also conducted just after the law passed, from April though July of 2010. It showed that worker health coverage at both small and large firms continued to slide overall, though the differences from year to year were not statistically significant. The survey did find, however, that 60 percent of the firms in California with fewer than 25 workers were aware of the tax credit in the bill—and that 57 percent of those firms were planning to take advantage of the tax provision.

Historically, it is true that many small businesses have had to pay more to insure their employees than larger firms. Administrative charges are higher than for big companies, and in some states, insurers can charge small businesses higher premiums for workers with pre-existing health conditions as well as for older employees and women. Even though they may pay more for insurance, the benefits they receive are often less comprehensive than those offered to employees of larger companies. For example, the Commonwealth report found that only 48 percent of workers at small companies had adequate coverage as compared to 73 percent at companies with 50 or more employees.

The ACA is quite complicated and many small business owners remain confused about whether they qualify for a tax credit or how large it will be. They’ve also heard a lot of alarming misinformation about the bill from the Chamber of Commerce and other opponents of reform legislation.

That’s why the bill’s supporters have to launch their own public information campaign targeted to small business owners. The SBA’s teleconference was a last minute effort to change public opinion on the eve of the repeal vote and including the inaccurate interpretation of Kaiser’s survey results did little to help its case. But recently, several non-partisan resources have cropped up that can really help small business owners to understand how they could benefit from reform; including a tax credit calculator on the Small Business Majority site and a similar tool developed by tax experts H&R Block for BlueCross BlueShield of Kansas City.

There are six million small employers in this country with 43 million employees; another 22 million people are self-employed. The current health care system leaves too many of these Americans uninsured or woefully under-insured; the new provisions that are part of ACA are designed to help. This is an evolving and flexible process—for example, HHS has already granted waivers to hundreds of employers who are concerned that offering comprehensive coverage (instead of "mini-med" plans) for low-wage employees will be a financial burden. The small business community will be better served when the anti-reform rhetoric is lowered and employers have a chance to understand the health law and actually calculate  how they can benefit from the legislation.