Category Listing

NATA Releases

Join The Fight Against Health Care Reform Provisions Affecting Small Businesses

What’s at Issue
The U.S. House of Representatives and the U.S. Senate have completed health care reform legislation in their respective chambers.  H.R. 3962 was passed by the House on November 7, 2009, and the Senate passed H.R. 3590 on December 24, 2009.  Both bills contain provisions negatively affecting small businesses.

Why It’s Important
As the House and Senate begin conference committee proceedings later this month, it’s not too late to make the case against harmful provisions that are detrimental to you and your business.

Major Provisions
H.R. 3962 and H.R. 3590 are similar bills with some major differences.  Below is a summary of the unfavorable provisions in each bill.

House-passed bill (H.R. 3962):

Employer Mandate requires employers to pay for health care for full-time and part-time employees.

  • Employers will be required to offer a government-mandated benefits package.
  • Employers must pay at least 72.5% toward the cost of individual plans and 65% toward the cost of family plans.

These additional costs will be difficult on small businesses, and the cost of the mandate will ultimately result in fewer employees at lower salaries.

Payroll Tax 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 a government-mandated health insurance package to their employees.

Paperwork Mandate requires all businesses to report transactions of more than $600 which will increase operating costs of small businesses.  

Small Business Options prohibits the use of health savings account, flexible spending account (FSA) and medical savings account funds to purchase over-the-counter medications; caps FSA contributions to $2,500; and, threatens to limit further the ever-shrinking options employers have to provide meaningful health care to their employees.

  • 5.4% Surtax: Will impact one-third of small businesses that employ 20 to 250 employees.
  • If revenue is $500,000 (or $1million for joint filers), the employer will be required to pay this additional tax. 

Public Option Congress would create a government-run insurance plan to compete with private insurance.

Senate bill (H.R. 3590):

Government-Run Health Care Plan the bill contains a government-run or public option health care plan that may contain an opting (in or out) mechanism.

Small Business Health Insurance Tax imposes a new $60 billion dollar tax that would affect small businesses because the tax is assessed on the insurance companies, which will ultimately pass this cost on to the consumer.

New Employer Mandate places multiple penalties on businesses with or without health care coverage based on the employees’ income.  The penalties are assessed on the full-time employees that will result in fewer employees and jobs in this country, which currently has a high unemployment rate.

New Reporting Requirements for Small Businesses increases the administrative burden on small businesses by imposing a new reporting requirement on business transactions of more than $600 annually.  This new reporting requirement will impose approximately $17 billion on businesses.

New Payroll Tax on Small Employers Increases the Medicare payroll tax and uses the additional revenue to pay for non-Medicare programs.

NATA Position
Despite numerous polls showing that the majority of Americans are opposed to the major health care reform legislation being proposed by the House and Senate, both bills passed their respective chambers.  Both H.R. 3962 and H.R. 3590 are counterproductive and raise the overall cost of health care.  Imposing new taxes makes employers unable to create jobs at the worst possible time for the economy.  NATA strongly encourages its members to be outspoken in opposition to the provisions in the House and Senate bills that are unfavorable for small businesses.  Call, write, or visit your representatives today!

What to Do
Contact your Members of Congress by visiting NATA’s Legislative Action Center.  NATA’s Legislative Action Center provides association members with a quick and easy way to email letters directly to Members of Congress in their state. 

Members of the U.S. House of Representatives supporting H.R. 3962.

Members of the U.S. Senate supporting H.R. 3590.

As conference negotiations begin, it is unclear how long it will take Congress to work out the major differences in each bill and agree on a final version of health care reform legislation.  It is possible that, after much time spent on this legislation, a final outcome could be no bill at all. 

Staff Contact:   Kristen Moore
Director, Legislative Affairs

Click here to view in PDF format.