Protecting small businesses from the pains of Obamacare


Ohio is the proud home to over 900,000 small businesses. They are the vast majority of businesses in Ohio and create two out of every three jobs in our state. The success or failure of these small businesses is key to making the Buckeye State work.

Every week I have the opportunity to meet with small business owners and their employees from all over Ohio, from retail to manufacturing to services. When I ask them about their top concerns, I consistently hear about health care, including the increasing costs and complications caused by Obamacare. They talk about the sharp increase in premiums, deductibles and co-pays for them and their employees, and the new limits on the kind of health care plans they can offer. And they talk about how the new law discourages adding new employees.

If we are going to turn our economy around, create more jobs, increase wages, and expand access to affordable health care coverage, then we must confront the reality of President Obama’s health care law. It’s not what was promised to the American people and it’s just not working.

One recent example of Obamacare’s impact on small businesses is the new tax on health insurance premiums. Since many large employers self-insure, they are not subject to the tax. Instead, the tax falls disproportionately on smaller businesses. These new taxes alone are projected to cost employers and their workers up to $102 billion by 2024.

The downsides to Obamacare do not just stop at increased costs however. The president’s health law also makes it more difficult to obtain affordable coverage by placing restrictions on Health Savings Accounts (HSAs) and other flexible savings arrangements. These new taxes and rules represent a step backwards to affordable health coverage, when we should be trying to make it easier, not harder to access quality care.

A solution to these problems is the Small Business Health Relief Act, which I introduced last January. This is a common sense reform bill that repeals the Obamacare tax and several provisions that make it harder to afford coverage. The Joint Committee on Taxation has estimated that repealing the new health insurance tax alone will decrease the average family premium by $350 – $400. Just think about what those savings could do for working moms and dads. It’s more money that could be used to pay bills, buy groceries, or put gas in the car.

Our bill also repeals multiple restrictions Obamacare placed on Flexible Spending Accounts (FSAs) including the $2500 limit on annual contributions, making it much easier for workers to use their tax-free dollars to pay for co-payments, deductibles, and medications.

Another concern I hear is that Obamacare forbids businesses from offering stand-alone Health Reimbursement Arrangements (HRAs), which allow small businesses to reimburse employees or directly pay for health insurance and qualified medical expenses. Since most small employers don’t have human resource departments or benefit specialists, many small businesses used HRAs as a way to provide benefits to their employees without the administrative burden of a costly group plan.

Under Obamacare, employers who want to offer such a benefit could be fined $100 a day per employee or as much as $36,500 in a year. This is just another example of how unfriendly Obamacare is towards small business job creators. To solve this problem, I’ve co-sponsored another proposal, which would allow small businesses to continue to have the option of using HRAs to assist with providing coverage without the punishing fines.

Another concern I have heard a lot about is the new Obamacare rules on small businesses with 50-99 employees. Starting on January 1, 2016, these companies would be defined as “large employers,” forcing them to adhere to the same costly Obamacare requirements as large employers, while still being defined and regulated like the smallest of employers. The concern is that this will cause premiums to rise even more and some employees could see a disruption in their coverage. To prevent this from happening I co-sponsored the Protecting Affordable Coverage for Employees Act, which will prevent small businesses with 50-99 employees from seeing a rate shock or a disruption in their coverage. The significant bipartisan support for this legislation has led to its swift passage in both the House and the Senate and it was signed into law in early October.

Finally, for some small businesses that have chosen to offer comprehensive health care plans, they are now being told the government will impose an onerous tax starting in 2018. While the tax is intended to get employers to reduce the benefits of these high-cost plans, it targets everything from wellness plans and employer contributions to flexible spending accounts, the very benefits employees utilize to stay healthy and utilize fewer health care services. The so-called “Cadillac tax” will affect a lot of employees who could never afford a Cadillac but do enjoy good health care for themselves and their families that they don’t want to lose.

When President Obama was trying to sell the Affordable Care Act, he said it would reduce health care costs and help small businesses. That’s sure not what I see. I believe there was a better way to reduce health care costs and help small businesses and their employees. The reforms I’ve proposed would address some of the worst aspects of a failed law.

By repealing painful fees that increase costs and rolling back mandates that limit coverage we can allow more people to access quality coverage without hurting our economy. These are reforms that I am committed to and will continue to push for so that more people can get the health care they deserve without hurting the small businesses that are the backbone of our economy.

By U.S. Senator Rob Portman

Rob Portman is a United States Senator from the state of Ohio. He can be reached online at Viewpoints expressed in the article are the work of the author. The Daily Advocate does not endorse these viewpoints or the independent activities of the author.

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