The Health Care Law's Impact on Small Business
This week is the 50th annual National Small Business Week, a time to show our appreciation for all that small businesses do in our communities and for our economy.
I am always meeting with small businesses in our district, and over the last three years, many have expressed serious concerns about the impact the health care law will have on their companies and employees. I share many of these concerns, which is one of the reasons why I voted against the health care bill when it was being considered in the House in 2010 and why I’ve voted to repeal it since it became law.
While there are far too many unanswered questions about the law’s implementation, below are some of the questions that have been raised to which I can help answer.
What is the health insurance exchange and will Texas have one? The health care law established health insurance “exchanges” for consumers and small businesses. Exchanges, which should be ready to begin enrolling people by October, are supposed to be a place where the public can compare benefits offered by participating health insurance plans and choose the one that is best. Every state will have an exchange. Some states will run their own exchange and others, like Texas, will have an exchange that is run by the federal government.
Are employers required to provide health care coverage for their employees? The short answer is “no,” but there’s a little more to it than that.
- Businesses with 50+ employees that do not offer insurance can be subject to fines if an employee receives subsidies from the government to purchase health insurance on the exchange.
- Businesses with 50+ employees that offer insurance may still be subject to penalties if even one full-time employee receives government subsidies because the employer-based plan would cost over 9.5 percent of their household income. These same penalties could also be administered if the plan that is offered covers less than 60 percent of the employees’ health care expenses.
- Businesses with less than 50 employees will not be subject to these penalties.
- Some small businesses with less than 25 employees are eligible for a temporary tax credit of up to 35 percent to offset the cost of providing insurance to employees.
The federal government has missed several deadlines in setting up new health insurance exchanges. What do these delays mean? So far, the Government Accountability Office (GAO) – Congress’s watchdog arm – has said that even with the delays, the exchanges will be ready by October. But GAO also warned that “any additional missed deadlines closer to the start of enrollment could [impact the establishment of exchanges].” Nonetheless, the delays have had some impact, as small businesses that enter into the exchange will not be given a choice about which plan to enroll in until after the first year.
As a small business owner who sold insurance for over 20 years, I remain extremely concerned about the impact the health care law will have on small businesses in our community. I also share many of your concerns that the employer mandate and confusing new regulations could prevent small businesses from growing, which will have a negative impact on our economic recovery.
Please reach out to me with any additional questions.
Member of Congress