What small businesses need to know about health care reform

Published 9:01 am Wednesday, March 17, 2010

As early as this week, our elected officials in Washington will take a health care vote that could devastate many small businesses here in Virginia.

Our elected officials claim this $900 billion bill will lower costs. But somehow that isn’t adding up. So let’s get the facts straight. No more sound bites, and no more talking points. The fact is this health care bill is about helping everyone except small business.

Below are three things every small-business owner needs to know about the legislation being forced through Washington.

1. Small businesses will be forced to provide health insurance.

This bill is loaded with mandates and really expensive punishments. Despite its claims, Congress has not looked out for small business. Plain and simple: the legislation forces small firms to provide health insurance, whether they can afford it or not. The mandate applies to growing firms and those with 50 or more employees. And in a backroom union deal, it was extended to apply to already-struggling small construction firms with as few as 5 employees.

Penalties are outrageously high — $2,000 per employee, which you can imagine could easily devastate any local construction firm. Even scarier, Congress is now trying to extend this onerous mandate to all part-time employees – a prospect that would hit millions of already-struggling small firms.

2. Small businesses will pay more taxes.

On top of all the new mandates and penalties, small businesses will also be saddled with a new annual $6.7 billion tax on their health insurance plans. Congress will try to tell you that this is a tax on the “big bad insurers.” But here are the facts.

The new tax falls on health insurance companies based on their market share – the larger an insurer’s market share, the higher its share of the $6.7 billion it has to pay. Sounds fair enough, right? Wrong. We’re overlooking a major point here. Insurers aren’t just going to absorb a $6.7 billion tax out of the goodness of their heart. They will pass it on to their customers, and it will increase costs by more than $500 per family annually.

Not only will small businesses be the customers this tax is passed on to, but they will be shouldering this burden alone. Big business and unions negotiated a deal that exempts them from this fee. This is just another sneaky way to tax small business by funneling it through the very insurance they need to purchase.

3. Small businesses and their employees won’t be able to “keep the coverage they have.”

This bill removes much of the already-limited flexibility small employers have and need when shopping for health insurance plans. They now will be forced to buy plans that meet standards determined by the government, even if they don’t need a plan that extensive. For many self-employed and small businesses, even those who already have insurance, their costs will go up in order to meet these new expensive coverage requirements.

With small businesses suffering from premium increases of more than 113 percent over the last 10 years, you would think the goal would be to make insurance less expensive and more flexible. Small businesses need more choices and more flexibility – not more out-of-touch officials in Washington telling them how to run their business and what insurance to buy.

These are just three of the most egregious provisions Virginians, especially small-business owners, need to know about the 2,700-page health care legislation charging through Congress. Not only does the plan spend $900 billion we don’t have, but it’s paid for on the backs of small business. This is not the reform small business asked for or can afford. They need reform that lowers their health care costs, and the bill Congress is trying to jam through simply doesn’t do that.

So, we all need to ask ourselves: Who is really working for small business? As we watch Congress ignore our protests and jam through this bill, it is up to us to let them know they are pushing policies that threaten our community’s very livelihood. We all need to tell our congressmen that voting for this health care bill is a vote against small business.