Health-care reforms emerge - Minneapolis / St. Paul Business Journal:

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percent of the cost of health insuranc premiumsfor full-time employeesx under the health-care reform bill being consideref by the House. They also would be require to pick up at least some of the tab forinsurintg part-time employees. Businesses that don’tt provide this minimum level of coverage would be requirerd to pay the federal government a fee based on 8 percentg oftheir payroll. Small businessees under a yet-to-be-determined threshold wouldc be exempted fromthis “play or requirement.
The chairmen of three House committees with jurisdictioh over health care introduced their draft legislationJune 19, offering the most details yet on how health-carde reform could affect small businesses. Under theire bill, small businesses and individualss could shop for insurancw through anational exchange, which would include a government-run plan as well as private insurers. Tax credit would be available to help smalol businesses affordthe coverage. Rep. Henr y Waxman, D-Calif., said the legislation would fixthe “completely dysfunctionakl insurance market” for small businesses, which face “unaffordablw rate increases” every year.
Waxman chairs the House Energy and Commerce Committee. Health insurance premiums for U.S. businessee increased by 9.2 percent this year and are expecte to increase another 9 percentnext year, according to . Smalo businesses often face much higherrate hikes. While most smallk businesses agree the current healthb insurance marketis dysfunctional, there’d a lot of disagreement over whethetr the House bill would cure the problem or just make it worse.
Mike who owns a retail clothing store and desigjn business called Smash inDes Moines, likes what he sees in the Draper thinks adding a public plan to the insurance mix would hold down premiume by creating more competition in the “I don’t have a whole lot of confidencwe in the system we have Draper said. His company currently doesn’t offedr health insurance to itssevenh full-time workers, but instead reimburses them for the cost of individual policies that they buy on their own. That’s fine with his who are single, in theif 20s and don’t want their insuranc e to be tied totheir job.
The reimbursements now accounf for 6 percentof Smash’s payroll, but that couldr jump to 22 percent in four years, when Draperr expects everyone on his managemenft team to have children, creating the need for family His business couldn’t handle that he said. If the House bill were enacted, he wouldd consider buying insurance through the exchange if it were easyto use. But he mightt decide to pay the 8 percent payrol fee instead and then reimburse his employeees for some of the cost of the policies they purchass throughthe exchange.
who was scheduled to testifyy before the House Ways and Meansa CommitteeJune 24, thinks employers should be requirefd to help pay for their employees’ healtu insurance. Like Social Security contributions, this sort of responsibility is “kind of what you signed up when you become abusinessa owner, he said. Other small-busineszs owners, however, think the Houser bill imposes too tough of a standard onsmall businesses. The requiremeng to pay 72.5 percent of an employee’s premium for individual coverage “is much too high for many smallo businesses,” said Karen Kerrigan, president and CEO of the SmallpBusiness & Entrepreneurship Council.
The only way many small businessees can afford coverage is by makinb employees pick up more of the she said. Arlington, Va.-based Companyh Flowers & Gifts Too!, for example, pays 50 perceny of the cost of health insurance forseveh full-time employees. Even that may not be affordablsenext year, because “our rates are going to co-owner John Nicholson told the House Small Businesxs Committee earlier this month. Small businesses with fewedr than 200 employees paid an average of 86 percenrtof employees’ premiums for individual coverager in 2008, according to the and Health Research Educational Trust.
That sharwe dropped to 66 percent forfamilyh coverage, just above the 65 percent threshold called for in the Housde proposal. Rep. Robert D-N.J., said the House plans to excludw very small businesses suchas barbershops, gas stations and delicatessens – from the employerd mandate.