Our U.S. House of Representatives had the audacity to pass a massive, game-changing healthcare reform bill that most of America doesn't want, according to a recent Rasmussen poll. I am eager to capitalize on this opportunity to do my best to ensure that every HARDI member company understands exactly how dangerous and damaging this House bill would be for employers and employees alike.

The House passed H.R. 3962, the ill-named “Affordable Healthcare for America Act,” during a rare and late Saturday, November 7, session by a narrow 220-215 margin with only one Republican vote (Louisiana Rep. Joseph Cao) and 39 dissenting Democrats. Many consider the bill “dead on arrival” in the Senate, but it is vitally important to not minimize the significance of a chamber of Congress ignoring so many of its constituents and insisting on passing a bill that so directly punishes businesses and fails to address even one of the underlying causes for skyrocketing health insurance costs. HARDI members who follow our Legislative Alerts and blog have seen these before, but it's important to re-emphasize how close we are as a country to enacting these dangerous policies under the guise of “reform”:

  • Employer mandate tied to a punitive “pay-or-play”: H.R. 3962 combines an employer mandate with a “pay-or-play” tax. Aside from the overly prescriptive tests an employer who provides coverage must meet, the payroll tax penalties threaten both those who do and do not provide coverage. Economic research has shown time and again that mandates are a “one-two punch” that is first borne by the employer but are ultimately borne by the employee ? through job loss and lower wages.

  • Surtax: Seventy-five (75) percent of small businesses are structured as pass-through entities and pay their business taxes at the individual level. More than one-third of small businesses employing 20 to 250 employees would face the tax. Finally, legislators have not indexed the tax for inflation. Therefore, its effect would creep downward, making more and more businesses vulnerable to a tax increase.

  • Public Option: A government-run plan cannot compete fairly with the private market, and ultimately the funding rests on the backs of small businesses. We believe that with proper reforms, it is possible to hold the private market accountable to provide greater competition and lower-cost solutions for small businesses and their employees.

  • Takes Working Solutions off the Table: Small employers need more, not fewer, affordable health insurance options. However, the prohibition of HSA, FSA and MSA funds to purchase over-the-counter medications, along with the $2,500 limit on FSA contributions, threatens to further limit the ever-shrinking options employers have to provide meaningful healthcare to their employees.

  • Big Benefit Package and More Mandates: Small employers typically pay 18 percent more for their healthcare. Small employers need a guarantee that plans offered in an exchange will be less costly, not more expensive, than what they are paying today. The benefit packages in H.R. 3962 are far more “benefit rich” than plans offered in today's marketplace and also require some small employers to provide additional benefits that go beyond the scope of current federal law.

  • Big Price Tag for the Government = A Bigger Bill for Small Business: As though the $1.05 trillion price tag wasn't enough to cause small employers concern, a recent CBO report revealed that $1.67 billion would be realized through penalties on employers and individuals. This only reinforces the fact that, as the cost of the government programs grow, so too will the financial burden placed on small businesses in the form of more penalties, fees and taxes.

Most do not believe that the Senate will have a final bill ready for a vote by the time you read this column, but we anticipate a great deal of work ahead. HARDI members have perhaps three of their most important action items ahead until “reform” bills like this are finally dead:

  1. Hammer your House representatives who voted for H.R. 3962 and make it absolutely clear to them how damaging a vote for final passage of any similar bill could be to their seat.

  2. Praise your House representatives who voted against H.R. 3962 and increase their resolve to fight any future similar legislation.

  3. Write, call and visit your senators weekly to urge them to oppose any form of employer mandates or penalties as part of healthcare reform policies. You are strongly encouraged to invite senators to visit your business so you can outline very specifically how the House bill would hurt your business and introduce them to who would be most hurt (your employees).

We are all extremely busy and scratching and clawing to survive through this challenging economy, which is exactly why we can't let a stroke of a pen change overnight how you run your business and compensate your employees. Keep the aforementioned three action items on your weekly to-do list (make them “Tasks” in Outlook with weekly reminders, for example). HARDI has prepared a list of positive health insurance reforms that would be very helpful for employers who provide group health insurance. We have listed them on the healthcare issue page on our Government Relations section of the website. We need reform but not the types of controlling and expensive changes the House insisted on passing last month despite, frankly, knowing better.


Talbot Gee is vice president of HARDI. Contact him at 888/253-2128 or tgee@HARDInet.org.