The Small Business Case for Repeal and Replace
The Small Business Case for Repeal and Replace
For years, members of the small business community have been testifying before the House Small Business Committee on the failures of Obamacare and the reasons it needs to be repealed and replaced.
House Republicans have been listening to them all along. The House has passed legislation that will clear the way for the repeal and replacement of Obamacare.
These Small Business Committee witnesses made the case for repeal and replace far better than any politician could. Here are their stories:
“These consequences led to a significant 25 percent reduction in the offer rate for small businesses between 2010 and 2015. For the first time, fewer than 30 percent of businesses with under 50 employees offered health insurance to their employees in 2015. Small business was clearly an afterthought during ACA consideration and implementation.”
“As Congress considers a partial repeal of the ACA through reconciliation and a repair of the health insurance markets, please prioritize affordability, flexibility, and predictability for small businesses. Health reform that works for small business will work for the rest of the country,"
“I think there are a lot of plans out there. I’ve read the Better Way plan and there are many things in there, we agree with.”
“I understand that most tax credits are designed to incent or change behavior and - to be clear - we have always provided health insurance for our employees. But the fact is prices have increased so dramatically year after year that we may not be able to continue to provide health insurance in the future …. Because we are ineligible, this tax credit does not help me in any way to provide affordable health coverage to my employees now. And unfortunately, it will not encourage me to do so in the future - if and when - I may be forced to stop offering insurance because of prohibitively escalating costs.”
“Based on my experience, I think part of the problem is that the rules for the tax credit are so confusing that small businesses cannot assess benefit of the tax credit without hiring outside counsel. Ultimately, any changes should not only increase the tax benefit to help small businesses provide health insurance for their employees, but must be simple and easily understood.”
“While I would like to testify today that my company has been able to benefit from the Small Business Health Care Tax Credit, that is unfortunately not the case because we are ineligible…We, as a small business, want to do the right thing and provide health care coverage for our hard-working employees."
“Small business owners rank the cost of health insurance as the most severe problem in operating their business out of 75 potential issues, with 56 percent of small business owners finding it a “critical” problem … The high cost of health insurance is the main reason owners do not offer employer-sponsored health insurance and the main reason owners discontinue providing the benefit. And for those offering, many owners annually confront the arduous task of adjusting profit expectations, insurance plans, cost-sharing and other mechanisms to help absorb often erratic changes in total premium costs.”
“[T]he mechanical tests used for qualified plan discrimination testing are overly complex and understood for only a limited number of tax professionals. A small business would not be able to apply those rules without professional help and many of the advisers to small businesses would not be familiar with the rules.”
“The impact of the aggregation rules, and hence our status as an applicable large employer, will have an impact on each of our businesses. Simply, the cost of doing business for each will increase, yet they must be able to stand on their own. Labor costs are typically one-third of a restaurant’s expenses. Operators only have a finite dollar amount to spend on labor costs given thin margins, including employee benefits such as health insurance coverage, and must manage these costs closely to remain viable.”
“These rules could cause employers to delay growth, manipulate ownership percentages or limit employees to less than 30 hours, discourage small businesses from investing in other businesses, and require health insurance coverage in industries where this is not the norm, which will affect a business’s ability to compete.”
“We believe it is fair to say that the law has created added uncertainty in the health care marketplace and contributes to more acute cost fluctuations, at least in the short run. So in this current post-ACA environment, self-insurance does provide smaller organizations more certainty in their ability to be able to continue to provide quality health benefits along with will providing them better costs containment capabilities.”
“Our membership reports almost universally that the looming PPACA-related market changes are causing significant anxiety within the employer community. Employers large and small are looking at all possible ways to gain greater control over their employee benefit options. We believe this need for control has sparked a greater interest in the possibility of self-funding among the small and mid-sized employer community.
It’s also causing employers of all sizes to reduce the hours of certain types of workers and consider the possibility of dropping coverage altogether. As the implementation of PPACA moves ahead in the coming year, we hope that Congress and this committee will consider providing additional flexibility to employers of all sizes to help relieve their anxiety and ensure that they can continue to provide affordable and stable coverage options to employees.”
“While switching to self-insurance provided a new set of challenges and has at times been a bit nerve racking in high utilization years, our decision to self-insure has been a good one. Based on estimates of the yearly average increases that the traditional health care plans charged in Connecticut for plans of our size, we believe that self-insuring saved the company over $400,000 over the span of four years.”