It’s not over! Federal healthcare debate continues. Contact Congress today!

You can still take action to help stop federal healthcare “reform” that will devastate small businesses.


On Nov. 7 the U.S. House of Representatives passed H.R. 3962, the Affordable Health Care for Americans Act. This week, Sen. Harry Reid introduced his version. Both versions include the so-called "Public Option."


Health Reform still must pass the Senate and then likely move to a Conference Committee for reconciliation. From there, it’s back to the House and Senate for another vote, so this fight is far from over.


Please take a few minutes and contact your legislators in Washington. Urge them to vote against the bills that are currently up for discussion.


Although the bill itself is 2,000 pages long, there are many good summaries available. One of the best was done by the Kaiser Family Foundation. You can find it by clicking here.


SBAM Member Testifies Before House Banking Committee

Former SBAM Board Chair Jeff Van Winkle testified before the House Banking and Financial Services Committee last week.  The subject of the hearing was the difficulties that small businesses in Michigan are facing in getting credit from the state’s traditional lending sources.

Van Winkle is an attorney with the Clark Hill law firm in Grand Rapids.  Among his specialties is working with clients to obtain financing.

Van Winkle testified that the relationship between banks and their business customers has changed significantly in the last year.  Generally, it has been difficult to obtain a commitment for financing on terms that have been satisfactory to the borrowers. 

He outlined three specific challenges that borrowers face when seeking new loans or extending existing loans:

  1. Substantial devaluation of the value of collateral offered to secure the loan.
  2. Exceptionally restrictive covenants regarding continued operation of the business.  These include limitations on capital expenditures, debt to equity ratios, and similar restrictions.
  3. A requirement of improved debt to equity ratio, specifically requiring cash equity to be injected into the business.
The committee also heard testimony from small business representatives, bankers and credit union officials explaining how new regulations from federal regulators are making it difficult to make loans that would have been given 18 months ago.  This is especially the case in Michigan and for manufacturers.


The committee will continue to look at the issue to determine if there can be a state solution to this problem.

SBAM tops 7,100 members in October

The Small Business Association of Michigan’s (SBAM) statewide membership now tops 7,100, up nearly 400 members from October.

“Small business owners continue to join our cause in record numbers because they believe in the power of numbers and they believe in our mission of championing small business at the state capitol,” says Barry Robinson, SBAM’s vice president for sales and marketing.

SBAM is the only statewide and state-based association that focuses solely on serving the needs of Michigan’s small business community. It has been successfully serving small businesses in all 83 counties of Michigan since 1969. Small business owners can join the fight by clicking here.


Special Thanks to SBAM Members on MBT Surcharge Repeal Letter

We would like to thank the more than 160 businesses who lent their name to our efforts to repeal the MBT surcharge.  You’ll recall that a couple of weeks ago, we sent out an alert for businesses to “sign” their name encouraging the Governor and the House to follow the Senate’s lead and support legislation to repeal the MBT surcharge.

The response from our members is greatly appreciated.  The effort was part of a broader coalition of business organizations joining together to support this issue.  The coalition’s goal was to obtain 1,000 signees.  Because of your efforts and those of other like-minded business owners, we were able to turn in more that 2,000 on the letter that was delivered to the governor and legislators earlier this week.

While there is agreement in the legislature that the MBT surcharge should be repealed,  agreement on how to do so remains a problem.  To date, the Senate Republicans have led on this issue.  We will continue to push this issue with members of the House, and keep you posted on updates.

Thanks again.

U.S House Passes Health Care Bill

In a rare Saturday session, the U.S. House of Representatives narrowly passed the House Democrats version of health care reform by a vote of 220-215.

SBAM opposes the House bill.  Among the reasons for our opposition are that it does little to contain the costs of healthcare, it includes an employer mandate and it places additional taxes on small businesses.

The Senate has yet to take up their plan but the goal of Senate Majority Leader Harry Reid is to do so before the end of the year.

Below is a synopsis of the current debate and the House and Senate bills.

Health Care Reform and Health Insurance Reform are both being discussed in Washington and while these two things are related, they are not interchangeable. 

Health Care Reform is reform of the delivery system and gets at things like the number of hospital borne infections, centers of excellence, the number of primary care doctors versus specialists, electronic medical records and e-prescribing.  It is reform of what is happening inside of the doctor’s office or hospital; this is where the debate started a few months back.

But today the debate seems to have shifted to Health Insurance Reform, which is reform of the financing system.  It is the conversation about who pays, what they pay for, individual and employer mandates, guarantee issue, pre-existing conditions, etc. 

In the House…

The U.S. House passed their version of health care/health insurance reform over the weekend.  The House Bill breaks down like this:

Cost:  According to the Congressional Budget Office, the 1,990 page bill would extend coverage to an additional 36 million people and has a price tag of $1.055 trillion over 10 years, with a net cost after tax increases and spending cuts of $894 billion. Remember, CBO estimates only the cost to the federal government, not what this new program may cost businesses, you and me – those of us that get to pay the bill.  Also, 10 years goes by in a flash, and many worry about the costs in the out years; there are no good cost estimates beyond 10 years. 

Public Option:  The bill calls for a new government run health insurance plan and CBO Director Douglas Elmendorf wrote that the plan “would typically have premiums that are somewhat higher than those private plans offered alongside of it.”  The bill goes on to prevent insurers from denying people with a pre-existing condition or dropping coverage when a subscriber gets sick.  So, assuming that you buy the argument that the biggest problem we face with health care is affordability, what does competition from a federal government health insurance plan with higher premiums actually get us?

Play or Pay:  For employers the bill requires that you “Play or Pay.” Employers that offer coverage are required to pay a minimum of 72.5% of the premium for individuals and 65% for families.  If an employer with payroll of $500,000 - $750,000 does not offer health insurance to his/her employees they face a fine of 2% of payroll (a fine of $10,000 to $15,000 a year).  For companies with payroll above $750,000 the fine increases to 8% of payroll.  This gets expensive in a hurry.  A company with a payroll of $800,000 would face a fine of $64,000 a year if they do not offer coverage to their employees. Assuming a small company can afford either, the big question will become, what is more expensive; health insurance premiums or paying the fine?  Companies with payroll below $500,000 would be exempt.

Individual Mandate:  For low income and middle income Americans the bill spends $605 billion to subsidize health insurance bought through a new government run health insurance exchange. Individuals are requi

Innovation Award entry deadline extended to Friday Nov. 13

Great news! You now have until Friday, Nov. 13 to enter your innovative product or service in this year’s Innovation Awards program (a part of Michigan Celebrates Small Business.) Any product or service launched in the past three years is eligible. Click here for more details and the entry form.