While only 7% of employees will be forced to switch to subsidized-exchange programs, at least 30% of companies say they will “definitely or probably” stop offering employer-sponsored coverage, according to the study published in McKinsey Quarterly.

The survey of 1,300 employers says those who are keenly aware of the health-reform measure probably are more likely to consider an alternative to employer-sponsored plans, with 50% to 60% in this group expected to make a change. It also found that for some, it makes more sense to switch.

Read the rest of the column at MarketWatch.com

WASHINGTON – Aerospace giant Boeing is joining the list of companies that say the new health care law could have a potential downside for their workers.

In a letter mailed to employees late last week, the company cited the overhaul as part of the reason it is asking some 90,000 nonunion workers to pay significantly more for their health plan next year. A copy of the letter was obtained Monday by The Associated Press.

“The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years,” wrote Rick Stephens, Boeing’s senior vice president for human resources.

Boeing is the latest major employer to signal a shift for its workers as a result of the legislation, which expands coverage to more than 30 million uninsured people and ranks as President Barack Obama’s top domestic achievement. Earlier, McDonald’s had raised questions about whether a limited benefit plan that serves some 30,000 of its employees would remain viable under the law. That prompted the administration to issue McDonald’s a waiver from certain requirements under the law.

Read the rest of the story.

The National Federation of Independent Business (NFIB)—the nation’s largest small-business advocacy organization—has joined the ranks of twenty state attorneys general in a lawsuit attacking the constitutionality of President Obama’s new healthcare law.

The May 14 announcement came on the heels of repeated calls from NFIB members nationwide to challenge Obamacare in court, according to Elizabeth Milito, senior executive counsel for the NFIB Small Business Legal Center in Washington, DC. Milito said the lawsuit charges the new healthcare law directly undermines the organization’s mission, which is to promote and protect the rights of small business owners to “own, operate, and grow their business.”

“NFIB worked diligently throughout the legislative process to try to shape and improve the healthcare bill as it was being debated,” Milito said. “When we felt the legislation had reached a point that was unacceptable to our members and us, we were vehemently opposed to the bill and worked to defeat it.”

 

‘This Unconstitutional Law’

There are many provisions in what she called “this unconstitutional law” that will devastate small business, Milito said, noting the lawsuit’s two main legal claims relate to the “unconstitutionality” of the individual mandate.

“We do not believe the commerce clause of the U.S. Constitution gives Congress the authority to regulate inactivity,” Milito said. “Requiring every individual to purchase health insurance or face a fine is an unprecedented and unconstitutional act of Congress. Requiring NFIB members to obtain and maintain health coverage deprives our members of their liberty and property interests without the due process of law.”

John Graham, director of health care studies at the California-based Pacific Research Institute, agrees.

“By allowing the federal government to define ‘coverage’, Obamacare reduces individuals’ and businesses’ freedom to decide what they want in a health-insurance policy and how much of their health dollars they’d prefer to spend on medical care, which is under their own control,” Graham said.

Read the rest of the article

By Rep. Michele Bachmann — As unemployment surpasses 10 percent, Congress continues to vow that job creation is a top priority. After the $1.1 trillion stimulus failed to prevent unemployment from rising above 8 percent as its proponents promised, lawmakers are feeling the heat from American families as they struggle to pay for their mortgage, college tuition, and healthcare.

Just last month, 190,000 jobs were lost. All year long, Democrats in Washington have been on a spending spree, claiming that the only way to save the economy from ruin was by spending big. Now House Democrats are using the same excuse to allow the government to take over our nation’s healthcare industry at the steep price tag of $1.3 trillion.

As the House debated the controversial bill late on a Saturday night, Democrats promised that their healthcare reform would help small businesses, lower their premiums, and offer affordable healthcare for all Americans. One of my colleagues on the other side of the aisle said it would “strengthen small businesses so they will be critical engines of growth in our communities.” Another lawmaker even went so far as to promise that the government takeover would reduce insurance costs for 14,800 small businesses in his district.

 

Many supporters of Pelosicare seemed to sympathize with small businesses and the strain that healthcare premiums place on these job creators. This is a noble goal and one that I share. But, it’s exactly why I oppose any legislation that would place the central control of our nation’s healthcare industry into the hands of the federal government. If costs and job growth is their top concern as my colleagues adamantly proclaimed on the House floor, they should also oppose Pelosicare.

Unfortunately, the rhetoric we are hearing does not reflect reality. Research shows that Speaker Nancy Pelosi’s (D-Calif.) healthcare would not decrease costs for American families and small businesses.  How can it when $729.5 billion of new taxes are imposed on the same small businesses and individuals who are already struggling to afford health coverage?

This government takeover of healthcare allows an unprecedented level of government interference. Section 202 of the House bill requires individuals to enroll in a qualified plan.  Meanwhile, Section 303 explains this bill does not design the qualified plan. However, small businesses and American families can be certain this bill does design the new taxes and fines to which they will be subjected. Essentially, the American people are being forced to sign on the dotted line and pay for a product they have not yet seen. 

Section 202 also provides a “grace period” for businesses to meet the qualified plan. Under this bill, businesses will be forced to reevaluate the benefits they are currently providing and adjust them to the standards created by a new bureaucracy that is unfamiliar with the needs of the company’s employees. If these businesses are unable to afford the new government mandates, they will be subject to an 8 percent payroll tax.

Read the rest of the story

As the Senate prepares to vote on its version of health care legislation, one of the most contentious issues will be a provision requiring employers to provide insurance coverage.

With the jobless rate at 10.2 percent and expected to climb, penalties for employers who don’t offer insurance benefits will make it difficult for moderate Senate Democrats to support the plan.

While most big companies provide workers with health insurance, many smaller employers do not, and they would end up having to come up with the money to either buy coverage or pay a penalty.

“There is no question it will result in job loss and it will encourage employers not to hire employees,” said John Goodman, president of the conservative National Center for Policy Analysis.

In the Senate, Democratic leaders are considering a $750-per-worker tax on companies that employ more than 50 people but don’t offer benefits.

The House bill passed narrowly on Saturday night requires employers to pay a tax of 8 percent of total payroll if they do not provide health care coverage that meets federal standards. The House bill requires companies to pay 72.5 percent of a single worker’s health care premiums and 65 percent of a family’s coverage.

Goodman called the proposal “a huge tax on labor,” especially if it is coupled with the 2.5 percent income tax that would be levied on an individual who went without coverage under the House bill.

The House bill would also assess a graduated payroll tax beginning at 2 percent for companies earning $500,000 annually and rising to 6 percent for those making between $670,000 and $750,000 per year.

Read the rest of the story

Legislation Increases Costs, Limits Choices and Kills Competition

Below is the National Federation of Independent Business’, the nation’s leading small business association, top 15 list why H.R. 3962 is a non-starter for small business.

1.  Employer Mandate – The bill includes an employer mandate that will require employers to offer healthcare to full-time and part-time employees.  An employer mandate is a job killer and does not address the No. 1 issue facing small businesses: unsustainable costs.

2.  Payroll Tax Penalty – Payroll taxes are an especially onerous tax because they tax labor.  No matter how profitable or unprofitable a business might be, they are forced to pay this tax.  The legislation requires that all employers with a payroll of $500,000 or more pay a payroll tax of up to 8 percent if they do not provide “qualified” health insurance to their employees. Simply put: this is a tax on jobs.

3.  Pay-or-Play, Pay-and-Pay and Offer-and-Pay – The legislation establishes a confusing multi-part test that hits both employers who do and do not offer health insurance.  A non-offering employer will pay a payroll tax penalty. An offering employer must meet the following criteria:
- Offer a “qualified” plan as defined by a government-appointed board
- Offer “qualified” individual and family coverage
- Meet premium contribution requirements of at least 72.5 percent for individuals and 65 percent for family plans
If an employee declines coverage from their employer, and is able to obtain coverage in the exchange, then the employer is also penalized with a payroll tax penalty of up to 8 percent.

4.  A “Minimum” Plan with a Big Price Tag and New Mandates – Today, among businesses with less than 50 employees, 82 percent who offer coverage offer only one plan. H.R. 3962 gives a political board the power to define “coverage” and will determine whether an employer plan is “acceptable.” The bill does nothing to ensure that the new plans will be less costly than what small employers are paying today and even requires some small employers to cover benefits that are not currently mandated under federal law.

5.  Government-Run Public Option – The public option in H.R. 3962 fails to deliver what small employers have long sought – a reformed, private insurance marketplace that can lead to more affordable coverage and a sustainable choice of plans. Instead, the public option will simply grow the size of government and will compete unfairly with private insurance. In the end, it could restrict choice to a single plan: the government-run plan, which will ultimately be funded on the backs of small businesses.

6.  New Onerous Reporting Requirements – H.R. 3962 places a new tax-compliance paperwork burden on all small businesses. Called “corporate reporting,” this expansion on reporting requirements (for transactions as small as more than $600) increases the cost of operating a small business and diverts resources away from growing and creating jobs. 

7.  The Surtax: A Tax on Job Creation – Seventy-five percent of small businesses are structured as pass through entities and pay their business taxes at the individual level.  More than one-third of small businesses employing 20 to 250 employees could face the proposed 5.4 percent surtax. When added to upcoming expected tax increases (like the expiration of the 2001 and 2003 tax cuts), the overall federal tax rate for these businesses will be 45 percent, which is 10 percent higher than the current corporate tax rate. Finally, since the tax is not indexed for inflation, the tax will affect more and more businesses each year.

8.  Jeopardizes Existing Solutions for Small Business – H.R. 3962 prohibits individuals from using HSA, MSA and HRA funds to purchase over-the-counter health products (except for insulin). This further limits the utility of this health insurance option, making it harder for people to “keep what they have.” 

9.  An Employer Tax Credit with Limited Value – While some small businesses can be helped by tax credits, the structure of this credit limits its potential success. The credit is only available for two years and limited to small businesses with 25 or fewer employees. To qualify for the credit the employer is required to pay for 50 percent of their employees’ premium, the firm must have an average annual compensation per worker of $20,000 or less to get the full subsidy, and the credit phases out completely at $40,000. U.S. Census data notes that the average wage of full-time employees at businesses with fewer than 10 employees is more than $30,000, meaning that in many cases the value of the credit is already cut in half. 

10.  Auto-Enroll Mandate – The auto-enroll mandate requires employers offering healthcare to auto-enroll employees into that healthcare plan. This burden means small businesses must develop a new system to ensure that employees are either enrolled in the plan or are informed about how they may opt out. Unlike larger firms, small businesses are less likely to have an HR department to handle new mandates like this, meaning that resources would need to be diverted from the day-to-day operations of the business to comply with this requirement. 

11.  All Powerful Insurance Commissioner – The unelected “Commissioner” will have unbridled authority to institute rules and regulations that greatly affect small employers, including the ability to define who is a full-time and part-time employee. Thresholds set forth by the commissioner would be subject to continual changes, leaving small business owners in constant fear of ever-changing compliance requirements.

12.  You Can’t “Keep What You Have…” – Despite assurances, H.R. 3962 sets a new standard for what qualifies as employer-based coverage and requires all employer plans to meet that standard within five years. While you may “keep what you have” now, you probably can’t keep it forever.

13.  Creates New and Expands Existing Government Programs – H.R. 3962 provides multiple examples of new government programs and expansions of current programs. This massive growth squeezes out private options, increases costs and expands reliance on the government.

14.  Small Employers Exposed to More Lawsuits – Throughout the text of H.R. 3962 there are “rules of construction” that provide “green lights” for trial lawyers seeking to file lawsuits against small employers.

15.  Studies that Paint a Grim Future For Small Employers – A number of government studies are laid out in H.R. 3962, including: a study to “recommend that laws don’t incentivize small and mid-size employers to self-insure” (p. 98), and a study allowing for recommendations to “improve and strengthen employer-based health plans sponsorship, employer responsibility…that would enhance the delivery of health care benefits between employers and employees” (p. 278). These studies are both costly and create a pathway for more government involvement in the workplace.