If Massachusetts is the prototype for federal health care reform, farmers and other small business owners may be disappointed. Self-employed operators gained better access to insurance since the state was the first to mandate insurance coverage in 2006, but that improvement has not come cheaply.

Adrienne Kravitz, a cranberry producer from Bridgewater, Mass., now hires all of her seasonal workers through a contractor and pays a premium to assure they receive coverage, a cost she considers manageable. Her own family coverage is another story, however.

"I am almost embarrassed to say what I pay," she said. Her tab is $4,800 per quarter for a family of five -- or almost $20,000 per year. Her premiums jumped 10 percent last year as the Massachusetts program finally went into effect.

CURBING INSURANCE INFLATION

Affordability of health insurance is the top concern of small business owners nationwide. Health care premiums have risen nearly 130 percent in the last eight years. Small businesses pay roughly 18 percent more for the same coverage offered larger businesses, according to the National Federation of Independent Business.

At the moment, Kravitz's AK Cranberries -- a family farm with Adrienne, her father and one full-time employee -- bears the full brunt of health care inflation. Some of her self-employed friends have dropped coverage to stay in business. Insurers have been pushing high-deductible policies for business owners, but Kravitz doesn't think they're worth the risk for a family with three young children.

Under the new federal law -- the Patient Protection and Affordable Care Act passed by Congress last month -- individuals and small businesses will have access to insurance exchanges starting in 2014. In theory, farmers and small business would have more parity with big employers, in part because premiums for the pool will be established for a standard population and the law sets limits on how much insurers can raise rates due to age.

It could take six months or more for federal regulators to write the rules governing health reform, so it's still too early to assess how agriculture will fare, said Frank Gasperini, executive vice president of the National Council of Agricultural Employers. He is especially concerned about how seasonal and part-time employees will be treated for mandatory insurance coverage, something Congress did not specify. While a few specialty crop and livestock producers could be affected, employers with fewer than 50 workers will be exempt from the mandate, however.

"The regulatory process will be long, there will be opportunity for input and comment, the legislation may still be modified by new laws passed prior to full implementation," Gasperini cautioned in a newsletter to members last week. "While the basic outline and time-lines will likely remain mostly intact, the final results are still difficult to predict accurately."

TAX CREDIT ELIGIBILITY

The scope of insurance reform is sweeping, but one key feature that could help some farmers immediately is a partial tax reimbursement for employee health costs.

To be eligible for a sliding tax credit of up to 35 percent of an employer's health insurance contribution from 2010 to 2013, businesses can employ no more 25 employees with average annual wages of $50,000 or less. The full health insurance credit will be available to employers with 10 or fewer employees and average annual wages up to $25,000. (Seasonal worker hours and wages are not counted in determining the number of full-time equivalent employees for this provision unless the worker is employed for more than 120 days during the taxable year, according to Neil Harl, an Iowa State University agricultural law and tax expert.)

The tax credit increases to 50 percent of the cost of health-care insurance in 2014.

Jon Bailey, who directs rural research for the Center for Rural Affairs in Walthill, Neb., remains hopeful that most farmers will find benefits long-term.

Once exchanges are in place in 2014, "small businesses are going to see another round of benefits because they can go online and find the best deals for themselves and their employees. Some might even pool [with other businesses] to have more bargaining power," he said.

"There's a lot of concern among small business people about how this is going to work and cost has always been their main concern," Bailey said. Controlling expense will be a big focus in the future, but the status quo's double-digit premium increases isn't sustainable, he said.

For a Kaiser Family Foundation summary and timeline of the health care provisions go to http://www.kff.org/…

Susanne Stahl contributed to this report.

Marcia Taylor can be reached at marcia.taylor@telventdtn.com