In the battle to pass some form of healthcare reform, small business is a major player. Earlier this year,
Now, what's on the table for healthcare reform has changed. In early September, the
Here are, from the perspective of small-business owners, some of the most important pieces of the current plan to reform healthcare.
Tax credits. The new carrots in the bill are in the form of tax credits for employers that provide their employees health insurance. But not every employer can cash in on these incentives. Only businesses with 25 or fewer employees would qualify. However, about 92 percent of small businesses with employees fall into this category, according to the SBA. There's one further qualification: The average wage of all of the business's employees must be no greater than
In 2011 and 2012, the bill would allow employers to deduct from their taxes an amount equal to the dollar amount the employer contributes for each employee's coverage, multiplied by a certain percentage. This percentage would be based on the amount of the employee's total premium contributed by the employer, or the average premium in the employer's state. Starting in 2013, the state insurance exchanges kick in, and the credit applies only to businesses that purchase insurance through those exchanges.
So would these write-offs revolutionize the way small businesses provide employee healthcare?
But there are also some potential problems. If a business owner starts paying employees more and the average wage surpasses the
Tax penalties. Although no employer will be automatically punished for not providing coverage, there are still some fines in the bill that apply to firms with 50 or more employees--only 4 percent of all businesses that hire. But for businesses included in that 4 percent, the tax penalties can be hefty. That's because the bill provides subsidies for individuals and families who make up to 300 percent of the federal poverty level to help them buy insurance through the state health exchanges. Employers that don't provide coverage will have to pay a tax penalty for each employee who receives these subsidies. This has been dubbed the "free rider" provision because it is intended to deter employers from "free riding" off the new health insurance exchanges.
The penalty is either the average cost of subsidies that year multiplied by the number of employees receiving subsidies or
Another complicating factor of the "free rider" provision for employers is that it might make them think twice about whom they hire. "It does distort the hiring decisions in the direction of employers who don't need coverage," says Solomon. A business owner might be inclined to look for potential employees who already get health insurance through their spouse, for example, in order to avoid dealing with the tax penalty. Choosing to hire or not hire someone on that basis could land a business owner in legal trouble.
Insurance taxes. One of the most controversial aspects of the Baucus bill is that, if passed, it would be partially funded by an excise tax on health insurance companies. In 2013, a 35 percent tax would kick in on insurance policies in which premiums are above
The good news is that as the
Makeover for Health Care
Anne Kates Smith
Amid heated protests, marathon negotiations and provocative advertising campaigns, U.S. lawmakers vow to change health care as we know it by Christmas. Here's the latest on what the new system might look like
One of President Obama's biggest challenges this fall will be persuading seniors to accept his healthcare proposals. Many elderly voters are deeply worried about 'Obama-care' because they fear that his plans will reduce their coverage and increase their costs. Seniors, in fact, are more opposed to Obama's healthcare ideas than any other age group.
Obama's Never Ending Healthcare Campaign
Kenneth T. Walsh
On issue after issue, every imaginable political organization, constituency group, and self-styled movement seems to feel it necessary not only to state its case but to wage an election-style campaign to advance its interests. The goal is to mobilize public opinion and take on the opposition, often by using hype, distortion, negativity, and name calling.
To Cut Health Care Costs, Let's Start With the Secret Prices
Bernadine Healy M.D.
As President Obama said again in his recent address to Congress, an imperative for health reform is containing runaway health costs. Look at a colonoscopy: When paid by Medicare, the fee is roughly $450. Consumers' ignorance of what services truly cost blurs the connection between their rising insurance premiums and prices, setting the stage for those prices to soar ever higher.
Time for Some Hard Choices on Health Reform: Revenue-neutral is not enough
Mortimer B. Zuckerman
Cost is the central dilemma facing the ambitious healthcare reform plan of President Obama to introduce a universal, new system of healthcare that will extend coverage to millions of people of limited means. Quite simply, it threatens to break an already fractured bank.
Health Reform Could Get You Hired
If healthcare reform makes insurance much more affordable to individuals and businesses, it could result in a greater variety of career options for workers. For one thing, it would reduce barriers to entrepreneurship. Reform also could make it easier for workers to leave employers to whom they are job-locked, or committed to solely for health benefits--a situation more common to older workers and those with pre-existing conditions.
Only the most blinkered of partisans can look at the "individual mandate" and not see it as the answer to the health insurance industry's prayers. It is a law that forces everyone to buy its product. What industry would not want this. That's what the individual mandate does for the health insurance industry. Not only would it force us to buy health insurance, but the 535 members of Congress, after hearing from every health insurance lobbyist in Washington, would decide exactly what coverage we need.
An Individual Mandate for Health Insurance Would Benefit All
William H. Frist
Let's face it, in a country as productive and advanced as ours, every American deserves affordable access to healthcare delivered at the right time. And they don't have it today. It is time for an individual health insurance mandate for a minimum level of health coverage. Catastrophic coverage would be an appropriate place to start.
Healthy Living is the Key to Healthcare Savings
Mark M. O'Connell and Tim Kaine
As final negotiations on health insurance reform continue, the debate has centered on achieving three basic goals: more security for insured Americans, affordable and quality insurance for the uninsured, and strategies to reduce the unsustainable growth in healthcare costs. There are many different ideas about how to accomplish these objectives. All agree, however, that the end goal of reform is individual health.
No Such Thing as an Unpaid Bill
My favorites are the few beet-faced droolers who show up at town-hall meetings to rail against government involvement, while simultaneously warning President Obama to 'keep your hands off my Medicare' -- the biggest, costliest, most socialistic government program in U.S. history. It's also a program that happens to work, although not nearly as efficiently as it could.
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Healthcare - The Baucus Healthcare Plan: What Small-Business Owners Need to Know
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