Although the $856 billion health care reform plan introduced Wednesday by Senate Finance Committee Chairman Max Baucus will not require employers to provide health coverage benefits, the plan will reinforce competition within small group markets by offering state-based exchanges, co-ops and tax incentives to small businesses.

Similar to proposed individual market exchanges, small businesses would have access to state-based Small Business Health Options Program (SHOP) exchanges. These exchanges would be web portals that "make comparing and purchasing health care coverage easier for small businesses." The proposal would also provide a tax credit to small businesses offering health insurance. In 2011 and 2012, eligible employers would be able to receive a small business credit for up to 35 percent of their contribution.

Once the exchanges are up and running in 2013, according to a statement released by the Committee on Finance, qualified small employers purchasing insurance through the exchanges can receive a tax credit for two years that covers up to 50 percent of the employer's contribution. Small businesses with 10 or fewer employees and with average taxable wages of $20,000 or less will be able to claim the full credit amount. The credit phases out for businesses with more than 10 employees and average taxable wages over $20,000, with a complete phase out at 25 employees or average taxable wages of $40,000.