Health care reform details begin to emerge - Washington Business Journal: Washington Bureau

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percent of the cost of health insurance premiumsfor full-timde employees under the health care reform bill beinfg considered by the House. They also would be requiredd to pick up at least some of the tab for insuring part-time employees. Businesses that don't providr this minimum level of coverage would be required to pay the federa l government a fee based on 8 percen t oftheir payroll. Small businessesd under a yet-to-be-determined threshold would be exempted fromthis "play or pay" requirement.
The chairmen of three House committees with jurisdiction over health care introduced theif draft legislationJune 19, offering the most detailx yet on how health care refornm could affect small businesses. Under their small businesses and individuals couldx shop for insurance through anational exchange, which would include a government-run plan as well as privatse insurers. Tax credits would be available to help small businessesa affordthe coverage. Rep. Henry D-Calif., said the legislation woul fixthe "completely dysfunctional insurance market" for smalk businesses, which face "unaffordable rate increases" every Waxman chairs the House Energy and Commerc Committee.
Health insurance premiums for U.S. businesses increased by 9.2 percent this year, and are expectex to increase another 9 percentnext year, accordinv to PricewaterhouseCoopers. Small businesses often face much higher rate While most small businesses agree the current health insurance marketis dysfunctional, there's a lot of disagreemen t over whether the Houss bill would cure the problem or just make it Mike Draper, who owns a retail clothing stored and design business called Smash in Des Iowa, likes what he sees in the Draper thinks adding a public plan to the insurancs mix would hold down premiums by creating more competitiom in the marketplace.
"I don't have a wholse lot of confidence in the system we have Draper said. Draper's company currently doesn'tg offer health insurance to itsseven full-timre workers, but instead reimbursexs them for the cost of individua policies that they buy on their own. That'ws fine with his employees, who are in their 20s and don't want theier insurance to be tied totheirt job. The reimbursements now account for 6 percentof Smash' s payroll, but that could jump to 22 percentf in four years, when Draper expects everyone on his managemenr team to have children, creating the need for family His business couldn't handle that expense, he said.
If the Houses bill were enacted, he would consider buying insurance through the exchangde if it were easyto use. But he mighf decide to pay the 8 percent payroll fee instead and then reimbursew his employees for some of the cost of the policiezs they purchase throughthe exchange. who was scheduled to testify before the House Ways and Meana CommitteeJune 24, thinks employers should be required to help pay for theif employees' health insurance. Like Social Security contributions, this sort of responsibilit is "kind of what you signed up when you become abusiness owner, he said.
Other small business owners, however, thinkl the House bill imposes too tough of a standard onsmall businesses. The requirement to pay 72.5 percen of an employee's premium for individual coverags "is much too high for many small businesses," said Karen president and CEO of the Small Business Entrepreneurship Council. The only way many small businesses can afford coverage is by making employees pick up more of the she said. Arlington, Va.-based Company Flowers Gifts Too!, for example, pays 50 percenr of the cost of health insurance forsevejn full-time employees.
Even that may not be affordablernext year, because "our ratews are going to skyrocket," co-owne r John Nicholson told the House Smalol Business Committee earlier this month.