Health reform: helping or hurting small businesses?

The U.S. Chamber of Commerce expressed “severe disappointment” with the new health care bill introduced in the House of Representatives on Thursday, citing concerns that the “wild spending” in the legislation would burden a fragile economy and tax small businesses.

Yet, President Barack Obama and House Speaker Nancy Pelosi have said legislators crafted the Affordable Health Care for America Act with small businesses in mind. Rep. Tom Perriello, D-5th District, said Friday he’s undecided on the new bill, but that reform measures would help small businesses.

The proposed bill would give small-business employees access to a “Health Insurance Exchange,” which would enable employers to offer more insurance options to employees, stabilize insurance costs from year to year and would give them access to rates normally enjoyed only by larger employers, according to Thursday’s fact sheet from the three House committees that wrote the legislation.

The bill establishes a grant program to help small businesses with wellness and preventive care programs. It also provides a two-year tax credit to assist small businesses in offering insurance coverage to employees.

Small businesses — those with annual payrolls of less than $500,000 — would not be required to offer insurance. Larger employers would be required to do so, or face a penalty of 8 percent of payroll.

Such a mandate would reduce employer flexibility and result in job loss and lower wages, Bruce Josten, executive vice president of government affairs for the U.S. Chamber of Commerce, said via news release. The Chamber strongly opposes the proposed additional taxes imposed on individuals for not purchasing coverage or for employers not offering coverage.

Josten continued that the inclusion of a government-run insurance option would result in costs shifting to other private payers and wouldn’t address affordability.

In a Friday press teleconference, Perriello said costs in the form of high premiums are already being shifted from the uninsured to the insured. He was unsatisfied with the original bill but believes the new bill addresses his concern of long-term fiscal responsibility.

Perriello said he’s focused on the issue of increasing competition to bring down costs, including the enhancement of interstate competition. He would like to see more done in that area and plans to study the 1,990-page bill this weekend before he makes a decision on it.

Ultimately, Perriello said, reform would benefit small businesses by decreasing premium pressures from the uninsured, creating more competition in the market and would enable them to pool risk.