Las Vegas Sun

March 29, 2024

Small businesses: Health care mandate a burden

Some small-business owners are concerned that a federally imposed mandate to provide health insurance to their employees, now under consideration in Congress, would impose a difficult burden as they struggle to keep their enterprises afloat during the recession.

Business is divided on whether an employer mandate should be part of a final bill, with some small-business owners and their advocates arguing that reform should focus on health care cost containment rather than adding a substantial expense to businesses that may not be able to afford it.

Other businesses, including Wal-Mart and some of the country’s biggest companies, want a mandate to level the playing field and eliminate the competitive expense advantages enjoyed by those that don’t cover their employees.

The House and Senate are working on health reform bills that are loosely based on an outline provided by President Barack Obama. The House bill would cost about $1.5 trillion over 10 years and would require employers to provide health care insurance and all individuals to have it. The legislation bars insurance companies from denying coverage based on preexisting conditions and protects workers from losing coverage when they change jobs. The biggest obstacles to the eventual passage of a bill appear to be its cost and the tax increases being considered to pay for it as well as deciding how far-reaching efforts to contain costs should be.

The House bill, America’s Affordable Health Choices Act, was passed 26-22 by the House Education and Labor Committee on July 17, but Rep. Dina Titus, D-Nev., was one of three Democrats who crossed party lines and voted against it.

In a letter to House Speaker Nancy Pelosi, Titus and other Democrats who voted against the bill said they did so because of a tax increase that would be levied against businesses that don’t insure their workers.

“Health care reform should be good for small business, and as long as small businesses are not unfairly burdened by (the bill), we are confident that it can,” the letter said. “We believe that any revenues for the health care program should be collected from a larger base than the critical small-business sector. We encourage you to seek more creative ways to reduce the overall need for revenue generation, and to propose a more equitable way of distributing the burden of any remaining means to ensure that health care reform is a success for small business, our economy and the millions of uninsured who stand to benefit.”

Las Vegas Valley small-business advocates said an employer mandate to provide health insurance would be a significant burden.

Most Henderson Chamber of Commerce members are employers with five or fewer workers, said Charles Perry, chairman of its legislative committee.

Although the consensus is that health care reform is necessary, putting it on the back of business is not the answer, he said.

“We need to keep folks in business and have a business environment that is friendly,” he said. “What we’re hoping comes out of this is a balanced bill that doesn’t rely on business health insurance for employees. Whatever you do, you can’t rely on one sector to get the job done. It has to be something where everybody has a stake.”

An employer mandate is “not something that is good for our community,” Perry said. “We’ve got people going out of business hand-over-fist in the Las Vegas community. There is just so much we can handle.”

But Perry said the proposal to allow small businesses to buy insurance as a group is an “excellent idea” because an expanded group with more insured members would lower premiums for everyone.

One company often criticized for its pay and benefits policies surprised some observers when it announced its position on an employer mandate. Wal-Mart, the nation’s largest employer, announced that it is supporting an employer health insurance mandate.

Wal-Mart is the 11th largest private employer in Las Vegas, according to In Business Las Vegas’ 2009 Book of Business Lists.

“We believe the mandate should cover as many businesses as possible, and cover part-time as well as full-time employees,” the company said. “Any alternative to an employer mandate should not create barriers or disincentives to hiring workers with disabilities, entry-level employees or people from low-income families.”

The discussion of an employer mandate is not new. President Richard Nixon pushed for such a mandate, as did President Bill Clinton, although neither was successful.

Although many Americans take employer provided health care coverage for granted, the practice only began about a century ago when the nation’s largest employers — railroads — began offering medical programs.

Before the mid-1900s, most Americans paid for their own health care. It wasn’t until World War II when wage controls were forced on employers that companies begin offering health benefits as a way to compete for workers.

Las Vegas Chamber of Commerce spokeswoman Cara Roberts said the group hasn’t polled members about an employer mandate.

Roberts said that because of the number of complicated issues still being debated, the makeup of the final bill is unknown.

“We still don’t know where the debate is heading,” she said.

Despite the lack of clarity about what a final bill could look like, she said the chamber is worried about a mandate that wouldn’t tackle the problem of ever-rising costs.

“The challenge isn’t that (small businesses) don’t want to provide it, they just can’t afford it,” Roberts said. “The mandate doesn’t solve the cost burden on them. It could put business out of business.”

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