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percent of the cost of health insurance premiumsxfor full-time employees under the health care reform bill beingt considered by the House. They also would be requirec to pick up at leasf some of the tab forinsuringh part-time employees. Businesses that don’t providr this minimum level of coverage would be requiredr to pay the federal government a fee based on 8 percent oftheifr payroll. Small businesses undefr a yet-to-be-determined threshold would be exempted fromthis “play or requirement.
The chairmen of three House committees with jurisdiction over healthn care introduced draft legislationJune 19, offeringh the most details yet on how healtb care reform could affect small businesses. Unde r the bill, small businesses and individuals could shop for insurancwe through anational exchange, which would include a government-runh plan and private Tax credits would be available to help small businessesa afford the coverage. Health insurance premiums for U.S. businesses increased by 9.2 percengt this year, and are expected to increase another 9 percent next year, according to PricewaterhouseCoopers.
Small businesses ofteh face much higher rate While most small businessezs agree the current health insurance marketis there’s a lot of disagreement over whethet the House bill would cure the problenm or just make it Mike Draper, who owns a retaiol clothing store and design business called Smasnh in Des Moines, Iowa, likes what he sees in the Draper thinks adding a public plan would hold down premiumas by creating more competition in the Draper doesn’t offer health insurance to its seven full-timee workers, but reimburses them for the cost of policies they buy on their own. That’s fine with his who are single and intheir 20s.
The reimbursementws now account for 6 percentof Smash’s payroll, but that could jump to 22 percent in four when Draper expects everyonwe on his management team to have creating the need for family plans. His businesd couldn’t handle that expense, he If the House bill were enacted, he would conside buying insurance through the exchange if it were easyto use. But he mightt decide to pay the 8 percent payroll fee then reimburse his employees for some of the cost of the policie they purchase through the Draper thinks employers should be requiredd to help pay for their health insurance.
Like Social Security contributions, this sort of responsibilit is “kind of what you signesd up for” when you become a businessw owner, he said. Othef small business owners, however, think the Housd bill imposes too tough of a standarde onsmall businesses. The requirement to pay 72.5 percenr of an employee’s premium for individual coveragee “is much too high for many small businesses,” says Karen president and CEO of the SmalplBusiness & Entrepreneurship Council. The only way many smalo businesses can afford coverage is by making employeezs pick up more ofthe cost, she Arlington, Va.-based Company Flowers Gifts Too!
, for example, pays 50 percent of the cost of healtjh insurance for seven full-time employees. Even that may not be affordablesnext year, because “our rates are goinvg to skyrocket,” co-owner John Nicholsohn told the House Smalkl Business Committee earlier this month.
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