NLBMDA ALERT: Health Care Reform

NLBMDA has long worked with a broad-based coalition of business groups to advance health care reform that would lower costs and increase access to quality health care. Unfortunately, the Democratic health care bill introduced in the House of Representatives, "America's Affordable Health Care Choices Act of 2009," (H.R. 3200) is a misguided approach that aims to expand health care coverage through a government-run public plan and costly mandates and taxes on the very small businesses the bill purports to help.

H.R. 3200 is a massive restructuring of the health care system in this country and includes many mandates and additional taxes on employers. The bill will create a public health care option and establish an individual mandate requiring every American to either buy private insurance or buy into the government run plan. If an individual fails to do so then they will be faced with a 2.5% tax on their modified gross income. Employers will be required to provide a payment towards healthcare costs to their workers. The minimum employer contribution in the case of an offering employer is 72.5% of the premium on individual plan and 65% of the premium for family coverage.

The so-called "pay or play" provision requires employers to offer a qualified plan to all employees. What is considered qualified will be determined by the Federal Government and currently the definition of employee appears to include both full and part time workers. If the offered plan does not meet federal standards or the employee opts to enter the public plan, then the employer must pay an 8% tax that will be contributed to the federal healthcare exchange.

This is a major burden for business in the current economic climate. An additional "surtax on the wealthy" that has been proposed to help cover the $1 trillion price tag of H.R.3200 will also impact the many small businesses that pay taxes on their individual tax returns. The surtax will begin for couples with a modified adjusted gross income of $350,000, and is expected to raise $554 billion, or half the total costs of the Democratic plan. Data from the Joint Committee on Taxation, however, says that at least 55% of the revenue raised by increasing the top two tax rates will come from small business income.

Take Action: The House may vote on H.R. 3200 this week before the August Congressional recess. NLBMDA and many of our federated state and regional associations have signed on to a coalition letter today to the Hill expressing our strong opposition to employer mandates and tax increases. Contact your Representatives today to urge them to oppose H.R. 3200 and work instead for real reform that cuts cost and improves competition in the health care system. You can quickly email your member of Congress through NLBMDA's Build the Vote website. Health care reform that increases costs for small businesses is a risky move that threatens our economic recovery.