What the new health care reform law means to your small business: SBAM audio/video webinar March 31

Get the facts on what the new health care reform law means to your small business: Free SBAM audio/video Webinar Wed. March 31, 2 p.m.

Puzzled, confused, apprehensive about the new health care reform law? It’s no wonder, because there’s lots of misinformation out there about the impact on small businesses. But SBAM has dug into the details of the new law and we’ve got the facts that will help you prepare for the impact of the new insurance coverage regulations.

Join us for a free interactive audio/video Webinar at 2 p.m. on Wednesday, March 31. Rob Fowler, SBAM’s President and CEO, and Scott Lyon, SBAM’s health insurance expert and Vice President Small Business Services, will be online to tell you what you need to know right now and in the future about the new health insurance law. You’ll have the opportunity to text in your questions during the Webinar and get them answered by our experts.

To register for the March 31 Webinar, enter your email address below. There is no charge to participate. Tell your friends and business colleagues so they can join in, too!

Questions? Email Vice President Communications Michael Rogers at

Election 2010

A recent poll shows that the race for the Republican nomination for governor is tightening up, and that House Speaker Andy Dillon has the early lead on the Democratic side.

Marketing Resource Group did a poll of Michigan voters between March 10 and March 15.  

The results show that Attorney General Mike Cox, Congressman Pete Hoekstra and business executive Rick Snyder are in a virtual dead heat.  Oakland County Sheriff Mike Bouchard is in 4th, and State Senator Tom George is barely registering.  

Cox         21%
Hoekstra    21%
Snyder        20%
Bouchard     10%
George         1%
Undecided    27%

On the Democratic side, now that the field is apparently set, most voters haven’t made up their mind.  However, House Speaker Andy Dillon has the early lead with Lansing Mayor Virg Bernero and State Rep. Alma Wheeler Smith still in single digits.  

Dillon        21%
Bernero     9%
Wheeler Smith 6%
Undecided    64%

The next few months should prove very interesting on the gubernatorial race and we will provide you with periodic updates.

SBAM Testifies in Support of Review of Administrative Rules

This week, the House Government Operations Committee took up HB 4988 sponsored by State Rep. Arlan Meekhof.  HB 4988 would provide an annual review of regulatory rules that effect businesses.  And more importantly for our members, it would require a periodic review of the impact rules have on small businesses.

The review would have to consider:  the continued need for the rules, the nature of any complaints or comments received from the public about the rules, the complexity of complying with the rules, the extent to which the rules conflict with or duplicate similar rules or regulations of the federal government or local government, and the date of the last evaluation of the rules and the degree to which technology, economic conditions, or other factors have changed regulatory activity covered by the rules.

Complying with the various rules and regulations that businesses face can be costly and time-consuming, especially for small businesses.  Large businesses have compliance officers and attorneys on staff to deal with these regulations.  Small businesses do not, and therefore must hire people to advise them on coming into compliance with these rules.

Additionally, increased administrative costs due to reporting requirements also have a disproportionate effect on small businesses.  It is much easier for larger businesses to absorb these costs when they have hundreds of employees.  Businesses with fewer employees cannot spread the cost as much and therefore are placed with a greater regulatory cost impact.

The bill was not voted on in committee this past week.  We will keep you posted on its progress.  A similar bill was passed by the Senate last year.  

New health care reform law has significant shortcomings for small business owners

(SBAM wants to know how the new law will affect your small business! Tell us in the comment section at the end of this story -- or contribute your views to our Forum.)


The National Small Business Association
(NSBA), SBAM’s national affiliate, says that the law will place significant new pressures on small businesses to both offer and pay for employee health insurance, starting in the earliest stages of reform. However, the provider-level reforms that could contain costs and enable small businesses to afford this commitment will not be fully effective for many years—if at all. The Association says that small companies caught between these twin pressures will see their ability to grow, prosper, and create jobs greatly diminished.

Additional shortcomings of the new law, according to NSBA:

  • Small business health premiums will continue to increase sharply, as even the Congressional Budget Office has determined.
  • The legislation does nothing to encourage cost-conscious consumer behavior, aside from the unnecessarily blunt “Cadillac tax,” which will not begin to have an effect until at least 2018, and which is insufficiently transparent and imposes unintended administrative burdens on small businesses.
  • The previously mentioned delivery system reforms are positive, but are too back-loaded, giving powerful vested interests years to water them down or remove them entirely. Even if implemented, they are not likely to have a significant effect on costs for a decade or more. Malpractice reform, absent from the current legislation, would make these reforms much more effective.
  • Though currently excluding most small companies, the large increases in “free-rider fees” are troubling. If there was once a distinction between an employer mandate and a free-rider provision, it seems to have been lost.
  • The very large tax increases on both earned and unearned income could have a significant effect on many small business owners and their ability to reinvest in their companies’ growth. These increases are in addition to the administration’s current budget proposal, which calls for significant income tax increases on the same individuals. Together, these taxes will create a steep increase in marginal tax rates on the very entrepreneurs we need to be investing and creating jobs.

Health care reform does next to nothing to reduce the cost of health care -- Analysis by SBAM health insurance expert Scott Lyon

Updated March 25, 2010

As you may know, the U.S. House of Representatives has passed the Senate health reform bill, and President Obama has signed it into law.  The vote was close (219-212) with 38 Democrats voting “no” on the bill along with every Republican. All of Michigan’s delegation voted along party lines.


Within the legislation, the root cause of the nation’s issue with health care – cost - was almost completely ignored.  As far as SBAM is concerned, the issue of cost containment is critical, and the reality is that this bill does next to nothing to reduce the cost


To best of our ability, SBAM will keep you informed of what is going on or changing along with some analysis on how this will impact our small businesses members and their employees.


Now that the health care bill has been signed into law, many of you may be asking what it all means.  Below is a brief analysis of what we know as of now.

For Small Businesses and Individuals:

  • Individual Mandate that requires most U.S. citizens and legal residents to purchase insurance.  There are subsidies for low income people and penalties if you don’t purchase.
  • Employer mandate for any employer with more than 49 employees with penalties if the employer does not offer coverage.
  • Health Insurance Exchange - portal through which individuals and small employers can review and purchase insurance.
  • Expansion of Medicaid and the Children’s Health Insurance Program (CHIP).
  • Small business tax credits for companies with fewer than 25 employees and average annual wages of less that $50,000 if employer pays more than 50% of the premium – note that it phases out for companies above 10 employees and as the average wage increases.

New Fees that will impact premiums:

  • New fees on pharmaceutical companies of $16 billion between 2011 and 2019, then $2.8 billion a year thereafter.
  • New annual fees on health insurance companies of $47.5 billion between 2014 and 2018 and then indexed by the previous year’s fee increased by premium growth.
  • New Fees on taxable medical devices of 2.9%.
  • Exclusion of the cost of over the counter medication from your Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) effective 2011.
  • Increases the threshold for itemized deductions of medical cost from 7.5% to 10% in 2013.
  • Limits the amount of contribution to an FSA to $2,500 effective 2013.
  • Increases the Medicare Part A tax from 1.45% to 2.35% for individuals making over $200,000 and families above $250,000 – so look out if your business is a pass through.
  • “Cadillac Tax” taxes on the most generous healthcare plans starting in 2018.

Insurance Carrier Related Changes:

  • Co-Op Plan in each state – non-profit member run health insurance plans.
  • Mandating Purchase – 4 basic benefit tiers along with an Essential Benefits Package (what must be covered and how they must be covered).
  • Guarantee Issue and Renewal.
  • Dependent coverage to age 26.
  • Eliminates lifetime limits on claims.
  • Rating rules – essentially modified community rating.
  • Exchanges – portals and purchase options beginning in 2014.
  • New medical loss ratios for carriers – 80% in individual and small group market and 85% in large group market.
  • New “sheriff” to review health insurance plan increases and justify the increase.
  • Limits deductibles to $2,000/$4,000.
  • Limits waiting period to 90 days.

Cost Containment is pretty weak:

  • Enhanced oversight of new providers of Durable Medical Equipment into Medicare and Medicaid.
  • Establish a

SBAM Update on Congressional Struggle Over Health Care Reform

(By SBAM health insurance expert Scott Lyon)

Health care reform continues to consume all of the oxygen in Washington, D.C., and on most of the cable news networks. The President has delayed his oversees trip hoping that by his new departure date of Sunday that he will have a major political victory in hand.

Meanwhile extreme political pressure continues to be exerted on the “holdout Democrats” in the House. Closer to home Rep. Dale Kildee has recently agreed to vote for the bill and Rep. Bart Stupak (and as many as 12 other House Democrats who do not want any federal funding for abortion) continues to hold out as a no vote. It seems to SBAM that every other member of our House delegation in Washington is in the camp of their political party – meaning that all of the Democrats are a yes vote and the Republicans are no votes.

On March 16, on behalf of SBAM’s 9,000 small business owners and their 100,000+ employees, I sent a letter to each of our Representatives urging a NO vote. We urge you to do the same. SBAM’s primary opposition to the bill is that it does very little with regards to cost containment. H.R. 3590 contains provisions that will increase the cost of private health insurance and damage our health care delivery system. The bill that passed the Senate includes billions in new taxes, and employer mandates or penalties.

House leaders are attempting what most would consider an end-run. They are working to structure a rule to “deem” the Senate bill completed upon passage of a companion bill that makes changes to the underlying Senate version. In other words, they would be making changes to a bill that has not seen a formal vote and is not law. In essence, they are hoping that the modified bill makes the underlying bill law, even though the bill being “corrected” has never been voted upon. Said Speaker Pelosi: "It's more insider and process-oriented than most people want to know...but I like it, because people don't have to vote on the Senate bill."

Speaker Pelosi may like "deeming" laws passed, but passing laws without voting on them is blatantly unconstitutional. As former federal judge Michael McConnell wrote in the Wall Street Journal:

"It may be clever, but it is not constitutional. To become law...the Senate health-care bill must actually be signed into law. The Constitution speaks directly to how that is done. According to Article I, Section 7, in order for a "Bill" to "become a Law," it "shall have passed the House of Representatives and the Senate" and be "presented to the President of the United States" for signature or veto. Unless a bill actually has "passed" both Houses, it cannot be presented to the president and cannot become a law." Only in Washington…

All the rule bending/breaking is intended to avoid putting House Democrats in the uncomfortable position of voting on the Senate bill directly, which contains many unfavorable provisions. H.R. 3590 contains provisions that raise costs and cause many problems for our health care system. The bill that passed the Senate includes billions in new taxes, a weak individual mandate that will drive up insurance premiums as people opt out of private insurance until they are sick, the expansion of Medicaid that will cripple state budgets, and a new national long-term care program that would make Bernie Madoff proud. It has been described by Senate Budget Committee Chair Kent Conrad (a Democrat) as a "Ponzi Scheme.” Further, HR 3590 still includes the special deals negotiated for individual Senators (read bought their votes) in several states including Louisiana, Florida and Nebraska among others. If this becomes law, Michigan taxpayers will be subsidizing these states’ Medicaid populations. Is our economy in good enough shape to afford that?

The House Rules Committee was expected to meet March 17 after the House Budget Committe

West Michigan business publication MiBiz calls SBAM President "Gardener in Chief"

MiBiz's article on SBAM's economic gardening efforts notes the organization's efforts to drive state policy toward growing entrepreneurial small businesses. Excerpt:

"Like plants in a garden, businesses of all sizes need to be tended to and nurtured in order to ensure a successful economy. Similar to crops, businesses’ needs are the greatest when they’re in the early growth stages. That’s not some hippie flashback from the 60s. Rather, it’s the Small Business Association of Michigan’s new mantra for the way the state should approach economic development in the 21st century. “The term economic gardening is what we’d like to put in the lexicon of public policy,” Rob Fowler, president and CEO of SBAM, told MiBiz." 

Here is the complete article:

By Joe Boomgaard | MiBiz

LANSING — Like plants in a garden, businesses of all sizes need to be tended to and nurtured in order to ensure a successful economy. Similar to crops, businesses’ needs are the greatest when they’re in the early growth stages.

That’s not some hippie flashback from the 60s. Rather, it’s the Small Business Association of Michigan’s new mantra for the way the state should approach economic development in the 21st century.

“The term economic gardening is what we’d like to put in the lexicon of public policy,” Rob Fowler, president and CEO of SBAM, told MiBiz.

Gardening fills a pillar of SBAM’s strategic plan for the next few years. Capitalizing on the looming change in leadership in Lansing, the state’s small business advocate wants to seize the opportunity to help drive state policy to favor small business interests.

“It’s a thought leadership role we intend to take,” he said. “We have a window of opportunity, and we must strike during this time, which is (with the election of) the next governor.”

Regardless of who wins the race for the state’s chief executive, SBAM wants to bring the discussion of small business to the forefront. And that starts at the top.

“We’ve had no help from this administration — no help from the beginning. I don’t want to be overly critical because no one has embraced entrepreneurship as a strategy. It’s never risen to the level of strategic importance,” he said.

Fowler said he’s never met a lawmaker that was anti-small business, but he’s fed up with being patronized by too many legislators whose words and actions don’t match up. If he and SBAM have their way, the politicians won’t get to define what’s good for small business — that task will be up to the businesses themselves.

“This is a whole new way of taking the issues to our membership,” Fowler said.

The small business community in the state seems to be listening. In an 18-month period, SBAM grew from 5,000 members to 9,000 by early 2010, thanks to some new membership strategies and the organization’s new message, according to Fowler. Not only does the organization help small business owners save money through group purchasing, it also serves as their collective voice in the Capitol, he said.

“Owners are mad, and it’s palpable,” Fowler said. “They’re frustrated and angry about what’s going on in the state, and they want movement. They know they can’t be influential by themselves, that they have to work together to have an impact. And what we’re talking about with them today is to join the fight. We have a different stance when it comes to fighting. We’re not going to be polite and diplomatic. We’re going to take the gloves off and fight for small business.”

Hunting needed, but not exclusively

SBAM has been especially vocal since the first of the year that the state’s 15-year economic development hunting safari hasn’t worked. The Michigan Economic Dev

SBAM Partners With Davenport University to Offer Special Tuition Rates to Small Business Owners

Through a new partnership with the 14-campus Davenport University (DU), members of the Small Business Association of Michigan (SBAM) and their employees (along with dependents) have the opportunity to further their education at a reduced rate. The SBAM/Davenport program offers 25% off tuition and waiving of the $25 application fee.

For more information, go to

Davenport has a rich history of providing relevant programs for future careers since 1866. DU has been a leader in business education and in recent years added programs in health and technology as those industries moved to the forefront. The university is well connected with employers and works together with the business community to develop programs to meet job demand.

Davenport offers associate’s, bachelor’s and master’s degrees in business, technology and health programs – areas essential to Michigan’s new economy. The university also offers a number of certificates to add to current credentials or prepare for certification exams. Campuses are conveniently located across Michigan and courses can be completed on campus or online.

If a company is interested in a program designed specifically for its needs, Davenport can assist. Through its Leadership Management & Development Institute (LMDI), Davenport can design training and deliver it onsite or at a DU campus. LMDI can also customize a current Davenport program and deliver courses onsite. To learn more about these and more services visit the LMDI Web site:

About Davenport University

Davenport University – the only West Michigan-based private university specializing in business, technology and health professions – serves an enrollment of approximately 12,000 students at its W. A. Lettinga Campus in Grand Rapids, at campuses throughout Michigan and online. Davenport focuses on innovative, practical and affordable education and offers graduate and undergraduate programs. More information is available at