Skyrocketing health care costs in recent years have posed challenges for all businesses, but small firms and their workers are at a particular disadvantage. Declines in insurance coverage among workers in small businesses (especially businesses with less than 10 workers) have driven much of the drop in employer-sponsored health insurance coverage nationwide. It is no surprise then that the effect of health reform on small business has become a flashpoint in the ongoing health reform debate. This brief highlights the challenges faced by small businesses and the positive effect of Senate Majority Leader Reid’s health reform bill (as released on November 18, 2009) on the ability of small firms to provide quality, affordable insurance coverage to their workers. It concludes by reviewing evidence from the Congressional Budget Office that shows major savings for many small businesses and their workers.