With the nation's health care system hanging in the balance while Congress is on its August recess, many small business owners believe reform is necessary for the sake of employees' health, and feel that implementing tax breaks for employers who offer coverage would encourage more widespread acceptance of new health care legislation among the small business community.
Despite proposals to increase taxes on higher-income Americans and charge assessments for some employers who don't offer health coverage to employees with the intent of lowering premium costs across the board, ADH Events principal and National Gay & Lesbian Chamber of Commerce (NGLCC)-certified business owner, Alexander deHilster isn't sure it will be enough to support the cost of the proposed health care system overhaul.
"I do think by lowering the overall premiums per year, employers would be able to afford to pay the insurance for more employees, including part-time employees," deHilster said, adding that he doesn't think "taxing the rich" would "pay for the additional expense of insuring everyone."
But as a business owner, the most important thing for deHilster when it comes to health care reform is affordability for the employer, through tax incentives or overall decreases in the cost of health insurance so employers can pay most or all of their employees' health costs.
Proposed in the House tri-committee's bill, a Health Insurance Exchange would allow individuals and businesses to "comparison shop" for coverage under various health insurance providers. In recent months, President Obama has emphasized the ability for the Exchange to reduce health care costs by encouraging competition on price and quality of coverage. But because many employers are happy with the coverage they currently offer their employees, no business would be required to enter into the Exchange. If businesses do choose to participate, the Exchange would initially be opened to employers with 10 or fewer employees, and then 20 or fewer after the first year, with larger employers having the option to participate over time.
Noma Hanlon, president of Hanlon-Brown Design in Portland, Ore. and NGLCC-certified business owner, offers all 22 of her employees health coverage, and pays 97 to 98 percent of their premium costs. Because of the cost it would incur to her business, however, Hanlon said she does not offer partner, spouse or dependent benefits.
Under the House bill, small businesses that provide health coverage are eligible to receive a credit against their income tax liability, up to 50 percent of the cost of providing the coverage.
Because she already offers her employees health insurance, she said she doesn't think the proposed health reform legislation would change anything as far as her business's health coverage is concerned. However, Hanlon thinks that implementing tax breaks for businesses that provide health coverage would be a "huge incentive."
However, there are some stipulations to the provisions offering tax credits to employers who offer health insurance-the full 50-percent credit is only available to businesses with 10 or fewer employees and with average employee incomes of $20,000 or less. As the number of employees and their average incomes increase, the tax credit phases out, with a cut-off at firms with 25 or more employees or with an average employee income of $40,000.
"It's easy for me to say that employers should provide health insurance for all of their employees, or at least pay for the bulk of it," Hanlon said. "There are so many small businesses that employ minimum-wage workers, and [paying for health insurance] would be really hard without some kind of assistance."
Hanlon and deHilster agree that the nation's health system should be focused on preventative and proactive methods of staying well, rather than just after-the-fact treatments that are often the result of unhealthy lifestyle choices and avoiding doctor visits until a problem is at its worst.
"Not going to the doctor because you can't afford it, but then seeing one when you're suddenly very ill, is much more costly than practicing preventative medicine with yearly mandatory check-ups," deHilster said.
Acknowledging that many people are resistant to change, Hanlon said a health care fix "isn't going to happen overnight."
"People don't necessarily like change and there is some question as to how [health care reform] will affect them," Hanlon said. "But I think we're at a tipping point in our health care and it needs to change."
