Small Business Sends Congress Health Care Reform Checklist
January 15, 2010
SBAM’s national affiliate the National Small Business Association (NSBA) sent a detailed letter to Congress urging their consideration of small business as they work toward combining the House-and Senate-passed health care reform bills. Of paramount importance to small business: contain and reduce the cost of health care.
In this tough economy, more and more small-business owners are being forced to make the tough decision between keeping their employees and keeping their health insurance. Congress must do everything in its power to make health insurance affordable NOW to ensure that small businesses can stop layoffs and start hiring.
In conjunction with the detailed letter, NSBA has compiled a comprehensive yet succinct checklist of what small business needs in any final reform package. This list highlights pieces of both the House and Senate bills that are preferable to small-business owners, and suggests several critical changes.
- Oppose any employer mandate as a threat to job growth.
- Support the House model for a strong individual mandate to ensure there would not be risk selection as healthy individuals opt-out until they need coverage.
- Oppose Senate language that arbitrarily excludes the construction industry from the overall small-business exemption to the employer mandate.
Insurance Market Reforms
- Support Senate language on market reforms such as guaranteed issue policies, the elimination of rating based on preexisting conditions and health status, and the 3:1 age rating rule.
Tax benefits for small businesses
- Support the Senate version of tax credits
- Include language to end the prohibition on self-employed business owners from fully deducting the cost of their health insurance—something all other business owners and workers are allowed to do.
- Support the inclusion of Senate language (Section 9022) to establish simple cafeteria plans for small businesses.
- Support Senate state-based health insurance exchanges in lieu of the House-proposed national exchange.
- Oppose the Senate’s free choice voucher provision which could negatively impact other employees.
Rein-in the cost of health care
- Support, expand and expedite Senate provisions on value-based purchasing programs and the Independent Payment Advisory Board to include all providers and facilities, and ensure small business representation on any such advisory board.
- Support and expedite all Medicare pilot projects in the House and Senate proposals, and include adjustments to the sustainable growth rate formula for physicians and other providers in Medicare Part B within the context of this bill—not as stand-alone legislation.
- Support as a good first step the Senate’s medical malpractice language that provides modest grants for state demonstration projects, and work toward more broad, long-term malpractice reform.
Coverage and Delivery Systems
- Support the minimum actuarial value specified in the Senate proposal (60 percent) and ensure small-business representation and consultation on any council to develop and evaluate the required basic health insurance plan.
- Include in final legislation the ability to use health savings accounts (HSAs) and health reimbursement accounts (HRAs) in combination with high-deductible plans. While neither bill is ideal, the Senate’s language on HSAs is preferable to the House proposal.
- Support Senate language providing for “young invincible” policies and expand eligibility to certain small businesses.
- Oppose a public health insurance option until more research is done to determine the impact of a public plan on the private insurance market, which is where most small businesses get their insurance.
Paying for Reform
- Oppose the Senate’s excise tax on high-cost insurance plans as such costs will likely be passed down to small businesses in the form of higher premiums and would create an administrative quagmire for small-business owners. Furthermore, failing to index the amount for medical inflation will ensnare more and more non-high-cost plans each year.
- Oppose Senate language proposing a 0.9 percent Medicare HI tax on wages in excess of $200,000 (single)/$250,000 (joint).
- Oppose the House’s 5.4 percent surcharge on income in excess of $500,000 ($1 million for joint returns) which stands to be a huge burden on small-business owners in pass-through entities. The only way this could be made less onerous is if any pass-through income that is left in the business would be totally exempt from any surcharge.
- Oppose taxes on medical devices and health insurers which will ultimately be passed down to consumers in the form of higher premiums.
- Oppose limits on flexible spending accounts (FSA) and HSAs.
- Oppose House and Senate language requiring corporate information reporting which clearly places the burden on the wrong taxpayer—the compliant small-business.
- Consider instead the NSBA-supported proposal to limit the value of employer-provided health coverage that is excludible from gross income based on a minimum benefit package.