Few small businesses signed up for insurance through the health exchange since October because of restrictive requirements.

Forty local businesses sought assistance from the Southwest Small Business Development Center, but only about 10 signed up, said small-business health options coordinator Sue McWilliams.

In Colorado, 220 small businesses enrolled in plans through the marketplace, providing coverage to 1,860 lives, according to data released by the state last week.

Enrollment in is still open for small businesses.

But some businesses walked away locally, McWilliams said, because tax incentives limited insurance choices for employees.

If small-business owners offer health insurance, their employees can't seek individual insurance through the state-run exchange or Medicaid, McWilliams said.

The self-employed who don't have employees must seek insurance through the marketplace for individuals.

The health care changes were set up with a stick-and-carrot system with tax penalties for large businesses that didn't offer insurance and tax credits for small businesses that signed up to offer their employees insurance through the state health exchange, said Jeff Bontrager, a researcher with the Colorado Health Institute. Penalties have been delayed for a year or two depending on the size of the companies.

Some small businesses qualify for tax credits equal to 50 percent of what they are contributing to employees' insurance premiums.

But the credits are restricted by a company's number of employees, the salary of the employees and tax structure.

For example some businesses don't qualify because employees make ; they have between 49 to 26 full-time employees; or business owners don't file their taxes for their business separately from their personal taxes.