As reported in an August 7, 2009 article in the Wall Street Journal (“SBA Chief: ‘I Know What It Will Take’”), Karen Mills, chief administrator of the Small Business Administration (SBA), was asked whether she supports the proposed “pay or play” mandate for health care reform. (“Pay or play” refers to proposed federal legislation that would require employers to either provide health insurance to their employees or pay a penalty to the government.)
Her response:
“There’s an understanding that small businesses are exempted – at various levels, but exempted – because ‘pay or play’ is not about small businesses. It’s about making sure that large businesses continue to provide (insurance) coverage.”
Huh?
The proposals from the U.S. House of Representatives most certainly will require small businesses to “pay or play.” To find out what gives, we called the SBA and talked to Assistant Administrator Jonathan Swain. He acknowledged that the Wall Street Journal quote was accurate but could not help us determine whether Ms. Mills supports a “pay or play” mandate.
Back on planet earth, here are the facts. If congressional proposal were enacted, employers with payrolls exceeding $400,000 would be required to provide health coverage to all employees or pay a penalty equal to 8 percent of the firm’s total annual payroll. Employers with payrolls between $250,000 and $400,000 would have to pay a smaller penalty, and businesses with less than $250,000 in annual payroll would be exempt.
Meanwhile, the health insurance reform proposal passed by the Senate Health, Education, Labor and Pensions Committee (HELP) would exempt firms with fewer than 25 workers from being penalized if health insurance isn’t provided. There is no mention of the annual payroll provision in this reform proposal.
Stephanie Cathcart, spokeswoman for the National Federation of Independent Businesses (NFIB), said NFIB doesn’t support any of the legislative proposals in Washington.
“Of all the bills out there, we’re still looking for something that works. None of these bills get to the core problem for small-business owners, and that is cost. There is a huge difference in the profit margin for small and large businesses. The House proposal, in particular, is a job killer for small businesses.”
Not only is it a job killer, but a government mandate like this would be a business killer. Case closed, shut the doors, the fat lady has sung. Call your Congressmember and tell him/her to drop the large roll of red tape and leave the building.
