The health-care reform bill passed in the U.S. House over the weekend by a vote of 220-215 doesn't have the blessing of everyone in the small business community.
Many small-business advocacy groups ramped up opposition of H.R. 3962 heading into last weekend's vote. They argue that the more than $1-trillion bill will be paid for on the backs of many of the nation's small entrepreneurs.
Here are the top 10 concerns about the legislation of some in the small business community, including members of the National Federation of Independent Businesses, U.S. Chamber of Commerce, Small Business & Entrepreneur Council, and the American Farm Bureau Association.
1. Employer mandates: Critics say the mandates will force unsustainable costs on small businesses already under pressure in this economy.
2. Tax Hikes: Payroll tax penalty of up to 8 percent for small businesses with a payroll of $500,000 or more if they do not provide “qualified” health insurance.
3. No Choice: Critics say that “pay-or-play” would cause businesses to be forced to offer government-dictated insurance that they may not be able to afford; and that it will limit flexibility employers have to develop innovative plans for their employees.
4. Fleeting Incentives: Critics say a temporary tax credit offered to “low-wage” small businesses is too fleeting and won’t help many entrepreneurs anyway.
5. Shutting Down Marketplace?: Critics argue a government-run public option will grow the role of Uncle Sam and fail to deliver a better private insurance marketplace. They say there will be more pressure for the new public plan to pay below-market rates, causing costs to shift to private insurers and employees who are covered by private plans.
6. Expensive Yellow Tape: Critics say some of the reforms will create needs for unnecessary additional record-keeping and accounting.
7. Breaking What Isn’t Broken: Critics point to threats to health-savings accounts and flexible-savings accounts (FSA) and whether those funds will still be able to be used to buy over-the-counter medications, along with a $2,500 limit on FSA contributions.
8. Harder to Start up: A surtax on pass-through entities like LLCs or Subchapter-S corporations, which make up 75 percent of the nation’s small businesses and pay taxes via income taxes instead of corporate taxes.
9. Big Pricetag: Who Will Pay? New taxes and fees to pay for reform; critics point to a recent Congressional Budget Office report, saying that $1.67 billion would be shouldered by employers and individuals via penalties.
10. Legal Liabilities Abound: Critics argue the legislation will leave the door open for exposure to many fruitless lawsuits.