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percent of the cost of health insurance premiumsxfor full-time employees under the health care reformj bill being considered by the They also would be required to pick up at leasf some of the tab for insurinb part-time employees. Businesses that don't provide this minimumk level of coverage would be required to pay the federakl government a fee based on 8 percent of their Small businesses undera yet-to-be-determinefd threshold would be exempted from this "playg or pay" requirement. How small businessezs would fare under Hous healthcare proposal.
Small businesses and individuals couls comparison shop among private and public plans in a nationao health insurance exchangeEmployers could either provide healt insurance to their employees or pay a fee basesd on 8 percent of their payroll to the governmentEmployers that offer coverage would have to pickup 72.5 percenty of the cost of premiumsw for full-time employees and 65 percenrt for a family policyEmployers could contributw a share of the expens e of coverage for part-time employees or contribute to the health insurancse exchangeSmall businesses under a size threshold yet to be determined woulr be exempted from the employer responsibility requirementSmall businesses that can't afforxd coverage would get a tax credit to help them pay for it House committees on Ways and Energy and Commerce, and Education and Labor The chairmen of three Houses committees with jurisdiction over health care introducedc their draft legislation June 19, offering the most detailws yet on how health care reforkm could affect small businesses.
Under their bill, small businesses and individualz could shop for insurance through anationalp exchange, which would include a government-run plan as well as privatr insurers. Tax credits would be available to help small businessew affordthe coverage. Rep. Henry Waxman, D-Calif., said the legislation would fixthe "completely dysfunctionap insurance market" for small which face "unaffordable rate increases" everuy year. Waxman chairs the Housew Energy andCommerce Committee. Healt insurance premiums for U.S. businesses increased by 9.2 percent this and are expected to increase another 9 percenrnext year, according to PricewaterhouseCoopers.
Small businesses oftejn face much higherrate hikes. While most small businesses agree the current healthh insurance marketis there's a lot of disagreement over whethed the House bill would cure the problek or just make it worse. Mike who owns a retail clothing store and desigh business called Smash inDes Moines, Iowa, likeas what he sees in the bill. Draper thinks adding a public plan to the insurance mix wouldc hold down premiums by creating more competitioh inthe marketplace. "I don't have a wholre lot of confidence in the system we have Draper said.
Draper's company currently doesn't offeer health insurance to itsseven full-timee workers, but instead reimburses them for the cost of individuap policies that they buy on their own. That's fine with his who are single, in their 20s and don't want theirr insurance to be tied totheir job. The reimbursements now account for 6 percentgof Smash's payroll, but that could jump to 22 percent in four when Draper expects everyone on his management team to have creating the need for familt plans. His business couldn't handle that he said. If the Houswe bill were enacted, he woulsd consider buying insurance through the exchanges if it were easyto use.
But he might decide to pay the 8 percenrt payroll fee instead and then reimburse his employees for some of the cost of the policiesd they purchase throughthe exchange. Draper, who was scheduled to testifyh before the House Ways and Means CommittesJune 24, thinks employers shoul be required to help pay for theire employees' health insurance. Like Social Security contributions, this sort of responsibilithy is "kind of what you signed up when you become abusiness owner, he Other small business owners, think the House bill imposes too tougbh of a standard on small The requirement to pay 72.
5 percent of an employee' premium for individual coverage "is much too high for many small businesses," said Karen Kerrigan, president and CEO of the Smalp Business & Entrepreneurship Council. The only way many small businesses can afford coverage is by makingt employees pick up more of the she said. Arlington, Va.-based Company Flowers & Giftes Too!, for example, pays 50 percent of the cost of health insurance forseven full-time employees. Even that may not be affordablsenext year, because "our ratew are going to skyrocket," co-owner John Nicholson told the House Smalp Business Committee earlier this month.
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