SmallBiz Vote

Kill it or keep it? Small business groups at odds on Affordable Care Act

Which small business group represents you on health care reform? The National Federation of Independent Business will present its case against the Affordable Care Act to the Supreme Court this week. But two other organizations, the Small Business Majority and the Main Street Alliance, submitted a friend-of-the-court brief defending ObamaCare. And a fourth group, the National Association for the Self-Employed, would like to see the Court strike down the part of the law  mandating that all individuals purchase health insurance, but opposes overturning the law altogether.

Small businesses are at odds about the Affordable Care ActAs business owners know well by now, the health reform law will legally obligate private, state, and local government employers with 50 or more full-time employees to provide "minimum essential coverage" and to pay for at least 60 percent of the actual costs of employees' benefits by 2014. Those employers who don't will be penalized $2,000 per employee beyond their first 30 employees, payable to the IRS. The mandate doesn't apply to employers with fewer than 50 employees, but the Act provides for "health insurance exchanges" to be set up and run by state governments in which these smaller employers may band together to get group discounts on insurance. Individuals, including the self-employed, who don't have employer-provided coverage will also be required to purchase coverage by 2014 or pay penalties.

The Supreme Court declined to review the Act's employer mandates. It will only review the constitutionality of the part of the law that requires individual Americans to buy health insurance. The National Federation of Independent Businesses will therefore argue that individual mandates are unconstitutional. If the Court strikes down the individual mandate, then, NFIB argues, the entire law must also go.

Gregg Thompson, NFIB state director for North Carolina, explained in the Charlotte Observer on Friday why NFIB is fighting the health reform law:

"Supporters argue that the health care law would create jobs, but small business owners tell us it would do just the opposite. It would make it even harder for them to keep the lights on, let alone grow…"

Thompson said that "job-hindering provisions" of the law include new taxes on health insurance plans; increases in Medicare payroll taxes; new taxes, fees, and mandates specifically targeted at the small business community; and prohibitions on Health Savings Accounts and Flexible Spending Accounts that limit employer and employee flexibility and drive up costs.

But the Small Business Majority argues that the Affordable Care Act will save small businesses money and potentially increase their competitiveness. The group's founder and CEO John Arensmeyer told UPI that:

The Affordable Care Act "takes aim at costs and has made a difference." Tax breaks specifically for small businesses plus other reforms in the law mean "small businesses are seeing relief and are seeing light at end of the tunnel," Arensmeyer said.  What's more, the federal money "is free money on the table," he said, noting that about 300,000 small-business professionals received about $435 billion in tax credits, and that number is expected to grow….Repeal of the law would be "disastrous" for small businesses, he said, because it would "mire them in a broken system, stunt growth and bleed them dry."

Arensmeyer's group today issued a document it calls an Actual Factual Brochure to help citizens make sense of the 2,700-page Act. Among the benefits to small businesses it cites are the exchange marketplaces that it says will enable small businesses to get rates comparable to what large businesses get, and tax breaks for employers of up to 25 workers with wages up to $50,000 that pay at least half of employees' premiums. (Another useful document, What You Need to Know about the Small Business Health Care Tax Credit, is available from the IRS.)

Jim Houser, owner of Hawthorne Auto Clinic in Portland, Ore., and a steering committee member at Main Street Alliance, said in a statement that the Affordable Care Act gives small businesses like his "more bargaining power, it holds insurers accountable, and it makes sure everyone is pitching in." The court challenge threatens to take all that away, he said. "There are plenty of ways to move forward on making healthcare work for small businesses—throwing out the Affordable Care Act and forcing us back into the same broken healthcare system we were stuck with before is not one of them."

Kristie Arslan, president of the National Association of the Self-Employed called the law a "good first step," but says it's a "mixed bag" for self-employed Americans, who comprise 78 percent of small businesses. Positives include guaranteed coverage regardless of pre-existing conditions or age. In creating the law, however, Arslan said Congress leaned toward creating access to better health insurance for all, but dropped the ball on making it affordable. "A lot of our members probably wouldn't be upset about a mandate if there were affordable options," Arslan said. "We think it should go back to Congress. Keep the market reforms but focus on cost."

The average NFIB member employs only 10 workers, putting most out of reach of the employer mandate. But NFIB President Dan Danner told the Washington Times today that:

NFIB's Research Foundation "found that 125,000 to 249,000 jobs will be lost because of this one tax; small business will shoulder 59 percent of this burden alone" and that "some employers of over 50 employees are considering shifting their full-timers to part-time, dropping health insurance altogether, or reducing employment to drop below the threshold."

NFIB's arguments will be heard by the Supreme Court on Tuesday and Wednesday. The Court is expected to hand down its decision in June. For a simplified guide to the arguments that will be presented before the Court today, tomorrow, and Wednesday, see this rundown from the Economist.

Which group speaks for you? Would the Affordable Care Act help or hurt your business? Tell us in the comments or Tweet your 140-character thoughts at #SmallBizVote.

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