FixHealthCarePolicy

Unions Using Obamacare to Punish Small Business

When does Washington consider a successful small business a problem to be dealt with? When that small business successfully competes against unionized firms. Then it needs to be tied down with expensive red tape until it is no longer so successful.

Say what? Members of Congress routinely extol the praises of small businesses as the engine of job creation – especially in these difficult economic times. This is standard practice on Capitol Hill – small businesses do not have the same resources as large ones, and they often cannot afford to comply with federal mandates. Rather than put them out of business Congress exempts them from expensive regulations.

The Senate health care bill also gives small businesses an out. The bill fines businesses $750 for each employee if the company does not provide more expensive “qualifying” health coverage to all their workers. However, companies with less than 50 workers do not have to pay this fine.

Or at least, that was how the bill was written. A small provision slipped into the bill at the last minute changes that threshold for the construction industry. Now any construction company with five or more workers would have to pay the fine. With a few paragraphs in a 2,074 page bill the Senate gutted the small business exemption for construction companies. (more…)

Tags: construction company, employer mandates, ObamaCare, small business, unions

Small Business Is Not Better Off Under Obamacare

An Issue Brief released yesterday by the Robert Woods Johnson Foundation (RWJF) concludes that small firms would largely benefit from the reform efforts that have been put forth in both the Senate bill (HR 3590) and the House bill (HR 3200). While the benefits from these bills to small businesses already are uncertain – and likely even deleterious – the latest version of the senate bill is even less likely to result in actual benefits for small employers.

Previous Heritage analysis has shown that small businesses would be affected by employer mandate structure under the House bill (HR 3200) and the cost-impact of this “pay or play” mandate is not trivial as the aforementioned RWJF Issue Brief purports. These mandates would effectively reach small firms with less than 25 workers—all small firms with, on average, between 21 and 25 workers— which are the small businesses that are supposed to reap the benefits of reform. (more…)

Tags: DirigoChoice, higher insurance premiums, Maine, small business

NFIB: Senate Health Care Bill Is “A Disaster” for Small Businesses

After “many months of discussion” in which the National Federation of Independent Business was engaged in efforts to ensure that the high cost of health care was adequately addressed in reform legislation, the organization yesterday came out in full force against the Senate health care bill, declaring it a “disaster for small business:”

Small business can’t support a proposal that does not address their No. 1 problem: the unsustainable cost of healthcare. With unemployment at a 26-year high and small business owners struggling to simply keep their doors open, this kind of reform is not what we need to encourage small businesses to thrive.

We oppose the Patient Protection and Affordable Care Act due to the amount of new taxes, the creation of new mandates, and the establishment of new entitlement programs. There is no doubt all these burdens will be paid for on the backs of small business. It’s clear to us that, at the end of the day, the costs to small business more than outweigh the benefits they may have realized.

(more…)

Tags: business, Harry Reid, health care, NFIB, ObamaCare, small business, taxes, unemployment

The Senate Health Bill: Bad for Small Business

The Reid health bill (H.R. 3590) leaves small businesses, and particularly small business owners, largely out of the picture. Small businesses, and particularly small businesses that currently do not offer health insurance coverage, will not get much break from this bill. Reid’s bill outlines a “small business tax credit”, which only lasts for two years and largely excludes small business owners, small businesses with high-average payrolls, and firms with 25 or more workers. After all exclusions, essentially the only eligible firms are those firms with 10 or fewer workers as well as those with low-income workers—the least likely to offer coverage even with a significant price reduction.

Reid’s bill, even with these “cost-reducing” tax credits, will not address the many uncertainties small businesses face in deciding whether to offer health insurance coverage to its workers. Small businesses—and particularly small business owners—most often find it difficult to predict year-to-year profits as well as health insurance costs. This is compounded for many small businesses with the fear of having to withdraw coverage in future years. Moreover, most small businesses will not find it worthwhile to begin offering even with the credits. In 2007, only 2.5 percent of total small employers in Maine actually purchased health insurance coverage through the “public option” offered through the state health insurance exchange, even with full knowledge of the program and its “benefits”. (more…)

Tags: employer mandates, Obama Health Care Plan, ouble digit unemployment, small business

How the Pelosi Plan Kills Jobs

Today the Bureau of Labor and Statistics reported that despite all of the Obama administration’s job creation claims, unemployment has risen to 10.2%. Instead of focusing on job creation, the left in Congress continues to pursue other priorities like their $1.5 trillion health care plan which is partially finance by job killing employer mandates. See chart below:

A recent study by the Kaufman Foundation found that small businesses have led America out of its last seven recessions, generating about two of every three new jobs during a recovery. But as Heritage’s John Ligon explains, Pelosi care discourages small business hiring at a time when government should be getting out of the way:

Health care reform cannot ignore how such legislation’s employer coverage mandates would negatively impact small businesses. The Pelosi plan eliminates the exemption for businesses with 25-49 workers created in the Baucus plan, and it would also impose new marginal penalties on small firms with 25 or fewer workers. This creates a punitive cost for firms, which significantly raises the costs for businesses on the margin.

Establishing disincentives for small firms to grow would lead to a slower, less robust economy–and labor market. Altering these incentive structures is harmful to small businesses and the way they allocate labor. Federal health care reform legislation, therefore, should avoid creating steep new marginal costs relating to business growth–particularly in terms of wages and worker compensation.

Tags: double digit unemployment, employer mandates, Obama Health Care Plan, small business

Chart: How 5.4% Surtax Hits Small Business, State by State

Rep. Charlie Rangel of New York and other House Democrats propose to pay for their $1.3 trillion bill to create government-run health care with a 5.4 percent surtax on 2.04 million high-income Americans — about half of them small business owners. Americans would face European-style taxes, paying top rates that – combined with local and state taxes – exceed those of economic competitors such as Germany and Japan. Taxpayers in Italy, Spain, and even France pay lower rates. And that’s not all: President Obama would have the power to increase the surtax.

Go here for the chart with all 50 states. (more…)

Tags: Charlie Rangel, corporate taxes, Democrats, europe, health care, new taxes, small business, States

Small Businesses Wary of Health Reform Bills

As many as 15 million people who work for small businesses paying lower salaries could lose benefits they currently have if a Democratic health reform bill is passed into law, USA Today highlights, citing estimates from the Congressional Budget Office.

“The estimates were based on an incomplete draft of a bill in the Senate Health, Education, Labor and Pensions Committee, but they touched off a broader debate about who might lose health benefits received through their company,” the article said, noting employees at smaller companies are likely to be more vulnerable.

“The health insurance system doesn’t really work well for small employers,” Heritage Foundation health policy analyst Greg D’Angelo said in the article. He pointed out “the number of people who lose insurance will depend on factors lawmakers are still negotiating.”

Tags: Congressional Budget Office, greg d'angelo, small business