S.C. Business Groups Split Over Health Care Reform Bill

By Free Times

For years, small businesses have seen the cost of providing health care to their workers increase at an alarming rate. But now that a health care reform bill has finally passed the U.S. House, business groups are divided over whether the measure will help the bottom line.

The U.S. House of Representatives passed the Affordable Health Care for America Act (H.R. 3962) on Nov. 7. Now the fight moves to the Senate, where South Carolina’s two largest small-business lobbying groups want different outcomes.

“Instead of making health insurance more accessible and affordable for small business, H.R. 3962 imposes more costs through its expensive employer mandates, punitive payroll taxes and a new government-run program — all of which will only result in more money coming out of small business owners’ pockets,” says J.J. Darby, director of the state’s chapter of the National Federation of Independent Business.

“Fundamentally, the bill does nothing to help any business whether large or small,” says Darby, whose organization averages about 5,000 members.

Frank Knapp, president and CEO of the South Carolina Small Business Chamber, says his board supports the bill.

Knapp says the House bill contains many of the provisions his board wanted: Tax credits to small businesses with up to 25 employees if they offer health insurance; 85 percent of small businesses will not be required to offer health insurance because their payroll is under $500,000; and 20 percent of the state’s workforce will be able to get health insurance through Medicaid.

“Overall, it would be a benefit to small businesses,” says Knapp, whose organization has about 10,000 members. South Carolina has 103,000 small businesses, defined as having 100 or fewer employees, Knapp says.

About 40 percent of businesses with fewer than 50 employees offer health insurance. The House bill mandates that for each full-time employee, employers with payrolls above $500,000 must contribute 72.5 percent of the premium cost for single coverage and 65 percent of the premium cost for family coverage. The penalty for failing to do so is a 2- to 6 percent tax on employers with payrolls between $500,000 and $750,000 and an 8 percent tax for employers with payrolls above $750,000.

Knapp says he disagrees with the employer mandate, but he believes it will change in the Senate.

“We fully expect the Senate version will be more favorable to businesses by excluding the mandate or raising the criteria for which businesses will be under the mandate,” Knapp says.

Also, Knapp says he’s in favor of the public option, which involves the federal government providing health care. The competition will cause private insurers to bring down their prices, he says.

But the public option is the main reason why Ike McLeese, president and CEO of the Greater Columbia Chamber of Commerce, opposes the bill.

“I don’t think the federal government should be in the medical insurance business,” said McLeese whose organization has about 2,000 members. “The system needs fixing, but putting the federal government in the insurance business is not the fix.”

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