The Federal Healthcare Bill
A Panel Discussion for the Members of the BBA
April 9, 2010
For more information:
Click on the links below to download information from the U.S. Chamber:
- Aftermath: New Realities for Businesses in theWake of the Health Care Law
- Health care implementation timeline
Is your business experiencing any “unintended consequence” as a result of the Federal Healthcare bill? If so, please email a summary to Alison Howell. We will summarize our member responses and provide to our elected officials.
The following is an attempt to summarize comments that were made by panelists and members of the BBA at today’s meeting. It is not intended to reflect specific policy positions of the BBA and is provided to the members as a service to them.
Katie Hayes, US Chamber of Commerce:
This is a 2,700 page bill with a trillion dollar impact on the Federal budget. Of particular concern to business is the employer mandate along with a significant expansion of Medicaid. There will be some small business tax credits but no change to ERISA. The US Chamber will mount legal challenges as there are thousands of pages of regulations forthcoming, the first kicking in five months from now.
Business owners are rightfully concerned about “in good faith” changes without much guidance. Employers are just now starting to share unintended consequences and impacts of this bill. There are no technical changes this year, but next year they begin and will continue over the next five years.
Rosemary Elebash, National Federation of Independent Businesses
The bill represents a massive increase in paperwork. For example, all business-to-business transactions of $600 or more will now be required to be reported on a 1099. The healthcare bill is really an IRS expansion program; not a wellness program. It’s estimated that the IRS will need to hire 16,000 new agents to monitor it. Alabama is joining many other states in considering passing legislation with an opt-out provision for our businesses. It is moving in the legislature and, if passed, would require a vote of the people statewide. We are one of the few states whose entire Congressional delegation voted against this bill. Small businesses employ 97% of the employees in the state – and this bill is going to hurt our recovery from “the great recession.”
Hall Shepherd, The Kennion Group
There is at least one good provision for small businesses in this bill; the elimination of pre-existing conditions will guarantee that all 1-2 person employers can purchase insurance now. Shepherd is very concerned about the inability for small businesses to form coalitions across state lines to purchase health insurance. He strongly believes the Federal mandate will drive health insurance costs up for small businesses. He regrets that the bill requires coverage for things that don’t matter.
Colin Luke, Balch Bingham
The Healthcare bill represents a massive increase in the size of government. It is estimated that the state’s management of the new responsibilities will require 2,000 more employees. There is no question that this bill will now consume a lot more of small business owners’ time. There is no mention of tort reform in the bill and the bill may move us nationally to a single payer system.
On the good side, there is enough time before the most onerous rules come into effect that there is time to make rule-making changes.
There may be two unintended consequences as a result of this bill:
- Employers may reduce their workforce below 50.
- Employers may choose to accept the penalty.
It’s doubtful that Alabama can afford any further expansion of Medicaid as it is already the state’s largest expenditure; therefore it’s understandable why we’re seeking to opt out, as difficult as that may prove to be.
Questions from the audience:
Why isn’t the US Chamber pushing for repeal?
It would be extremely difficult politically as the President has vowed to veto any repeal bill, plus it would require a 2/3 majority vote. With the most onerous aspects not beginning until 2012, there is time to make significant changes. However, the more employers opt to take the penalty, the more likely the penalty will be raised.
What is it that the state of Alabama is opting out to?
A constitutional amendment is being sought. The statewide vote would be to not mandate that businesses have to participate. Admittedly, this is going to be a tough legal fight.
Why is this not categorized as an “unfunded mandate?”
It simply is not. The Feds will be making grants to states for the establishment of an insurance exchange. There will be, however, other costs such as management of this, retirees, etc.
I have more than 50 employees and currently pay 50% of my employees’ insurance, what happens to me?
At present, you meet the minimum threshold; however at full implementation of the new bill, you will need to raise your percentage to 60.
Will more insurance companies be allowed to come in to Alabama and offer competition?
They’ll be allowed to come in IF they meet minimum requirements. Given the competitive reality here, it probably won’t happen.
I have less than 50 employees, what will it mean to me?
You may be eligible for credits this year but you will not be covered by the mandates.
I don’t have an HR department, how can I keep up?
There’ll be many changes to this bill as the bill that passed was actually never intended to pass. Lay low for now. There are websites such as www.employersforahealthyeconomy.com and www.startover.com.
Is this bill constitutional?
Government can use interstate commerce as justification; and to fight it on these grounds would be hopeless, particularly with our left-leaning judiciary.
How did this bill pass when a recent poll showed 85% of the public opposing it?
“Elected officials have just lost respect for the average voter. Please call and write your elected officials.”
There is nothing in the bill about patients buying healthcare prudently. As employers, what can we do about this?
There are wellness program provisions that allow premium discounts for participation. You can maintain co-pays and deductibles. You could also require employees to pay for their healthcare and then seek reimbursement.
Comments from BBA members in the audience:
- “Health insurance was never intended for sore throats; it was to provide protection against catastrophic events such as cancer, heart disease. There is nothing in the bill about taking personal responsibility.”
- “This bill is chaos in the making – a good bill would address tort reform as that impacts every physician, it would address the ability to buy insurance across state lines, there is very little in the bill about preventive healthcare, and there is a looming shortage of physicians and this is only going to accelerate it.”
