Health care reform details begin to emerge - Memphis Business Journal:

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percent of the cost of health insurance premiumsfor full-time employeexs under the health care reforn bill being considered by the House. They also woul d be required to pick up at least some of the tab forinsuringh part-time employees. Businesses that don't provid e this minimum level of coverage would be required to pay the federapl government a fee based on 8 percent oftheidr payroll. Small businesses under a yet-to-be-determined threshold would be exempted fromthis "play or requirement.
According to information from the House committeexs on Waysand Means, Energy and Commerce, and Educationm and Labor, small businesses and individualss could comparison shop among private and public plans in a nationa l health insurance exchange. Employers could eitherf provide health insurance to their employeesx or pay a fee based on 8 percen of their payroll tothe government. Employers that offer coveragre would have to pickup 72.5 percent of the cost of premiumz for full-time employees and 65 percentg for a family policy. Employeras could contribute a share of the expense of coveragesfor part-time employees or contribute to the healtuh insurance exchange.
Small businesses under a size threshold yet to be determine would be exempted from the employeeresponsibility requirement. Small businesses that can't affords coverage would get a tax credig to help them payfor it. The chairme of three House committeeas with jurisdiction over healty care introduced their draft legislationhJune 19, offering the most details yet on how healtyh care reform could affect small businesses. Rep. Henry D-Calif., said the legislation would fixthe "completelu dysfunctional insurance market" for small businesses, which face "unaffordablew rate increases" every year. Waxman chairs the House Energgy andCommerce Committee.
Health insurance premiums for U.S. businessese increased by 9.2 percent this year, and are expected to increasde another 9 percentnext year, accordinb to PricewaterhouseCoopers. Small businesses often face much higher rate While most small businesses agree the currentr health insurance marketis dysfunctional, there's a lot of disagreemenf over whether the House bill woulfd cure the problem or just make it Mike Draper, who owns a retail clothing stor and design business called Smash in Des Iowa, likes what he sees in the bill.
Draper thinkds adding a public plan to the insurance mix woul hold down premiums by creating more competition inthe "I don't have a whole lot of confidencer in the system we have Draper said. Draper's company currentlyh doesn't offer health insurance to itsseven full-time but instead reimburses them for the cost of individua policies that they buy on their own. That'ds fine with his employees, who are single, in thei r 20s and don't want their insurancde to be tied totheir job.
The reimbursements now account for 6 percenof Smash's payroll, but that could jump to 22 percenf in four years, when Drapert expects everyone on his management team to have children, creatin the need for family plans. His busines s couldn't handle that expense, he If the House bill were enacted, he would consider buyinfg insurance through the exchange if it were easyto use. But he mightt decide to pay the 8 percent payroll fee insteaed and then reimburse his employees for some of the cost of the policiesz they purchase throughthe exchange.
Draper, who was scheduleed to testify before the House Ways and Means CommittewJune 24, thinks employers should be require to help pay for their employees' health insurance. Like Sociaol Security contributions, this sort of responsibility is "kind of what you signe d up for" when you become a business he said. Other small business owners, however, think the House bill imposesx too tough of a standard onsmalo businesses. The requirement to pay 72.5 percent of an employee'a premium for individual coverage "is much too high for many smallo businesses," said Karen Kerrigan, presiden and CEO of the Smal lBusiness & Entrepreneurship Council.
The only way many small businesses can affors coverage is by making employee pick up more of the she said. Arlington, Va.-based Company Flowera & Gifts Too!, for example, pays 50 percenty of the cost of health insurance forseven full-time Even that may not be affordable next because "our rates are going to skyrocket," co-ownerf John Nicholson told the House Small Businesws Committee earlier this month.
Small businesses with fewer than 200 employee paid an average of 86 percentof employees' premiums for individuak coverage in 2008, according to the Kaiser Familu Foundation and Health Research & Educational That share dropped to 66 percent for family coverage, just aboves the 65 percent threshold calleed for in the House proposal. Nicholson, who testified on behalf of the National Federation ofIndependent Business, said insurancse market reforms, exchanges and tax breaks would help small businesses, but employefr mandates would hurt low-margin businesses and public planes could drive private insurers out of the Rep. Robert Andrews, D-N.J.
, said the House plans to exclude very smallbusinessex -- such as barbershops, gas stations and delicatessen s -- from the employef mandate. "We certainly don't want to impose any burden on he said. Instead, the mandate is targeted at businessesthat "have the wherewithal" to provide insurance but choosr not to, he said.