Finding Compromise in a Tough Healthcare Reform Debate

How congressional proposals would impact small businesses

House Tri-Committee’s America’s Affordable
Health Choices Act of 2009

Employer Mandate

Businesses with annual payrolls of $250,000 or less will be exempt from the requirement to provide health insurance coverage.

Businesses that provide coverage must pay at least 72.6% of the premium cost for single coverage and 65% for family coverage.

Businesses whose annual payrolls exceeding $250,000 must provide health insurance to workers or pay a sliding scale penalty that will range from 2% of payrolls of $250,000 to $300,000 up to 6% for payrolls of $350,001 to $400,000. The penalty fees will go into a Health Insurance Exchange Trust Fund to help finance affordability credits.

An Energy and Commerce Committee amendment would allow employees of companies with payrolls of $500,000 or less to enter the exchange and receive affordability credits. It also calls for a phase-in of the pay-or-play requirement for small businesses with payrolls between $500,000 to $750,000.

Businesses may choose to provide coverage to part-time employees by paying a share of the premium or contributing to the insurance exchange where employees can then seek coverage.

Pros: An employer mandate would level the playing field for businesses that have had problems attracting or retaining talented employees. Small businesses may become more appealing to talented workers who’ve stayed with larger employers because of benefits such as insurance coverage.

Employees of the smallest businesses will be able to buy insurance through the exchange.

Cons: It may become more expensive for some employers to provide coverage if they currently pay a smaller percentage of the premium cost than lawmakers are proposing or don’t provide coverage at all. Some fear, however, that employers will have to reduce wages or jobs and raise prices.

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