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The health care law requires businesses that employ 50 or more full-time or full-time equivalent employees to offer health insurance to their full-time employees. One critical issue is the definition of “employee,” while an equally important issue is determining which employees are attributed to the business. The answer may be simple for one business with a single owner. However, when an individual shares ownership of multiple entities or with multiple owners, some of them family members, the answer is less clear.
Under the presiding chairmanship of Rep. Chris Collins (R-NY), Chairman of the Subcommittee on Health and Technology, the Small Business Committee heard the testimony of concerned small business owners, examined the administration’s process of determining whether businesses are considered single or multiple entities under the health care law, and heard suggestions on what changes to the rules could be considered to reduce confusion.
“Small businesses need to know exactly what they have to do to comply with the health care law, and what it is going to cost,” said Chairman Collins. “Even at this late date, too many small businesses still do not have those facts. In particular, the business aggregation rules cause uncertainty among small businesses. The rules can be complicated and confusing, and small businesses need better answers and they need them quickly.”
Materials from the hearing are available on the Committee’s website HERE.
Deborah Walker, CPA, National Director, Compensation and Benefits, Cherry Bekaert, LLP, Tysons Corner, VA, said, “…[T]he mechanical tests used for qualified plan discrimination testing are overly complex and understood for only a limited number of tax professionals. A small business would not be able to apply those rules without professional help and many of the advisers to small business would not be familiar with the rules.”
Ellis Winstanley, Chief Executive Officer, Tradelogic Corporation, Austin, TX, testifying on behalf of the National Restaurant Association, said, “The impact of the aggregation rules, and hence our status as an applicable large employer, will have an impact on each of our businesses. Simply, the cost of doing business for each will increase, yet they must be able to stand on their own. Labor costs are typically one-third of a restaurant’s expenses. Operators only have a finite dollar amount to spend on labor costs given thin margins, including employee benefits such as health insurance coverage, and must manage these costs closely to remain viable.”
Donna Baker, CPA, Donna Baker & Associates, Adrian, MI, said, “These rules could cause employers to delay growth, manipulate ownership percentages or limit employees to less than 30 hours, discourage small businesses from investing in other businesses, and require health insurance coverage in industries where this is not the norm which will affect a business’s ability to compete.”###
Small Business Committee Chairman Sam Graves (R-MO) today welcomed House passage of the Small Business Capital Access and Jobs Preservation Act (H.R. 1105), which reduces burdensome regulatory requirements on small and mid-sized private equity funds that often invest in small businesses.
The legislation exempts private equity funds from expensive new SEC registration requirements imposed by Title IV of the Dodd-Frank Act.
“The Dodd-Frank Act creates excessive red tape that inhibits growth, and the costly new requirements on smaller private equity funds is a clear example,” said Chairman Graves. “H.R. 1105 helps reduce that regulatory burden on private equity funds in a common sense way, so that private sector capital isn’t unnecessarily restricted and these funds can remain focused on investments that help grow the economy.”
Private equity-backed companies employ over 7.5 million people nationwide in over 17,700 U.S. firms and have invested over $3.6 trillion in businesses in ten years.
In a December 3 hearing, the Small Business Subcommittee on Investigations, Oversight and Regulation examined the effects of the overall regulatory burden on small financial institutions, namely banks and credit unions, including Dodd-Frank regulations. The hearing specifically analyzed the impact of the Consumer Financial Protection Bureau and Basel III capital standards, among other financial regulations, finding that choices for consumers and small businesses are being limited as the number of banks decreases and one-size-fits-all regulations limit flexibility to make loans.###
The House Small Business Subcommittee on Investigations, Oversight and Regulation, under the chairmanship of Rep. David Schweikert (R-AZ), today held a hearing to examine the effects of the overall regulatory burden on small financial institutions, namely banks and credit unions. The hearing specifically analyzed the impact of the Consumer Financial Protection Bureau and Basel III capital standards, among other financial regulations.
According to the Federal Deposit Insurance Corporation, the number of banking institutions in the U.S. has fallen to its lowest level since at least the Great Depression, and many of the smallest banks have merged or closed. Small financial institutions are facing escalating regulatory compliance costs as a result of reforms to the regulatory structure enacted in the aftermath of the 2008 financial crisis, resulting in fewer lending options for consumers and small businesses.
“After an economic recession, this administration decided to do the opposite of what needed to be done to boost innovation, growth and jobs,” said Chairman Schweikert. “They promoted a law that has proven to be one of the most market-restricting in our nation’s history. The Dodd-Frank Act’s new rules are very complex and they have increased compliance costs – these are proving to be destructive to small lenders and the customers they serve.”
Materials from the hearing are available on the Committee’s website HERE.
Linda Sweet, President and CEO of Big Valley Federal Credit Union in Sacramento, CA, testifying on behalf for the National Association of Federal Credit Unions, said, “Despite the fact that credit unions are already heavily regulated, were not the cause of the financial crisis, and actually helped blunt the crisis by continuing to lend to credit worthy consumers during difficult times, they are still firmly within the regulatory reach of several provisions contained in the Dodd-Frank Act, including all rules promulgated by the Consumer Financial Protection Bureau (CFPB). The breadth and pace of CFPB rulemaking is troublesome as the unprecedented new compliance burden placed on credit unions has been immense.
“The impact of this growing compliance burden is evident as the number of credit unions continues to decline, dropping by more than 800 institutions since 2009. While there are a number of reasons for this decline, a main one is the increasing cost and complexity of complying with the ever-increasing onslaught of regulations. Many smaller institutions cannot keep up with the new regulatory tide and have to merge out of business or be taken over.”
B. Doyle Mitchell, Jr. President and Chief Executive Officer of Industrial Bank in Washington, DC, testifying on behalf of the Independent Community Bankers of America, said, “Left unaddressed, the increasing burden of regulation will discourage the chartering of new community banks and lead to further industry consolidation. Consolidation will lead to higher loan interest rates for borrowers, lower rates paid on deposits, and fewer product choices. A more concentrated industry, dominated by a small number of too-big-to-fail banks, will jeopardize the safety and soundness of the financial system and expose taxpayers to the risk of additional costly bailouts.”
Committee to hold Hearing on Health Law’s Business Aggregation Rules, Subcommittee Hearings on Impact of Regulations on Small Lenders and the Post-Recession Lending Environment
WASHINGTON, DC – The House Small Business Committee, chaired by Rep. Sam Graves (R-MO), today announced the schedule for the week of December 2, 2013:
On Tuesday, December 3, at 10:00 a.m., the Small Business Subcommittee on Investigations, Oversight and Regulations, under the chairmanship of Rep. David Schweikert (R-AZ), will conduct a hearing titled Regulatory Landscape: Burdens on Small Financial Institutions. The purpose of the hearing is to examine the effects of the overall regulatory burden on small financial institutions, namely banks and credit unions.
“Access to capital remains an issue for many small business owners and entrepreneurs,” said Rep. Schweikert. “Credit unions and small banks continue to struggle to keep up with the onslaught of new regulations stemming from the Dodd-Frank Act. The complexity of these regulations increases compliance cost, and the law requires additional capital be held against small business loans, further reducing the amount of capital available for small businesses.”
On Wednesday, December 4, at 1:00 p.m., the Committee will conduct a hearing titled, The Health Care Law: The Effect of the Business Aggregation Rules on Small Employers. The purpose of the hearing is to examine the process of determining whether businesses are considered single or multiple entities under the health care law for purposes of the employer mandate.
“The health care law’s use of these complex rules can cause real uncertainty for small businesses, such as family-owned businesses or entrepreneurs that have more than one business venture at a time,” said Chairman Graves. “Since the passage of this law in 2010, many small firms have had questions about whether their businesses fall under the aggregation rules and how to count their employees. Often the answers are not at all clear. The lack of guidance and clarity is just another example of a law that is unworkable and bad for small businesses."
On Thursday, December 5, at 10:00 a.m., the Small Business Subcommittee on Economic Growth, Tax and Capital Access, under the chairmanship of Rep. Tom Rice (R-SC), will conduct a hearing titled Where Are We Now? Examining the Post-Recession Small Business Lending Environment. Although bank lending to small businesses has improved over the past two years, it remains below pre-recession levels. The purpose of this hearing is to receive testimony from industry leaders and experts regarding the various factors and economic trends affecting levels of lending to small businesses.
“Federal Deposit Insurance Corporation (FDIC) data shows that traditional bank lending to small businesses has not fully rebounded from the recession,” said Rep. Rice. “Without access to needed capital, small businesses will have a difficult time expanding, thus slowing our economic recovery. I look forward to having a discussion about the various economic forces affecting current levels of lending.”
Watch the hearings live HERE.
Tuesday, December 3, 2013, 10:00 a.m. EST
2360 Rayburn House Office Building
Small Business Subcommittee on Investigations, Oversight and Regulations
Regulatory Landscape: Burdens on Small Financial Institutions
Wednesday, December 4, 2013, 1:00 p.m. EST
2360 Rayburn House Office Building
House Small Business Committee
The Health Care Law: The Effect of the Business Aggregation Rules on Small Employers
Thursday, December 5, 2013, 10:00 a.m. EST
2360 Rayburn House Office Building
Small Business Subcommittee on Economic Growth, Tax and Capital Access
Where Are We Now? Examining the Post-Recession Small Business Lending Environment
House Small Business Committee Chairman Sam Graves (R-MO) released the following statement in response to the Administration’s latest delay of the Small Business Health Options Program (SHOPs) enrollment:
“In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today’s news of yet another last-minute delay is more proof that the law is unworkable and bad for small businesses,” said Graves. “If small firms failed to provide services this frequently, they would be fired. Based on the June GAO report on SHOPs readiness that I requested, we knew the administration was not prepared for implementation, but this pattern of continued delay and disarray is especially disappointing. This mismanagement and inadequacy is causing the American people and small business owners to lose trust in their government’s ability to do just about anything.”
This list of delays and mismanagement:
• On April 1, the Administration announced that the employer health insurance choice on the federal SHOP exchanges would be delayed until 2015, limiting employers to one single plan.
• In June, a GAO report requested by Chairman Graves confirmed the administration was ill-equipped for the implementation of the SHOPs, showing potential for “implementation challenges going forward.”
• On September 26, the Health and Human Services Department announced the SHOPs online enrollment would be postponed from October 1 until November, forcing small businesses to enroll using paper forms. That same day, White House Press Secretary Jay Carney clarified the enrollment would begin on November 1.
• During a Ways and Means Committee hearing on October 29, CMS Administrator Marilyn Tavenner said the SHOPs would be operating at the end of November.
• On November 22, the administration extended the Obamacare federal exchange signup deadline (for January 1 coverage) from December 15 to December 23.
• Today’s delay announcement would be the Administration’s 4th SHOP-related delay.
By Carla Johnson
The Obama administration is delaying yet another aspect of the health care law, putting off until next November the launch of an online health insurance marketplace for small businesses. The series of delays was seized upon by Rep. Sam Graves, R-Mo., chairman of the House Small Business Committee. "In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today's news of yet another last-minute delay is just more proof that the law is unworkable and bad for small businesses," Graves said in a statement.
Wall Street Journal: Obama Administration Delays Online Health-Insurance Sign-Ups for Small Businesses
By Louise Radnofsky
The Obama administration has shelved plans for small businesses to sign up for insurance policies using the troubled HealthCare.gov website and will instead encourage companies to sign up through an insurer, agent or broker, officials said Wednesday. The news was quickly criticized by House Small Business Committee chairman Sam Graves, a Missouri Republican. "If small firms failed to provide services this frequently, they would be fired," he said.
By J.D. Harrison,
The Obama administration is once again delaying the launch of an online small-business health care exchange, pushing the deadline back a full year to November 2014, according to an internal memo obtained by On Small Business. “In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today’s news of yet another last minute delay is just more proof that the law is unworkable and bad for small businesses,” Rep. Sam Graves, chairman of the House Small Business Committee.”
By Jason Millman
The Obama administration today announced a one year delay of online enrollment for small businesses looking to purchase health coverage through federal Obamacare exchanges, another high-profile setback for HealthCare.gov. House Small Business Committee Chairman Sam Graves (R-Mo.) said it’s been apparent for months that the small business enrollment website wasn’t ready to launch. “Based on the June GAO report on SHOPs readiness that I requested, we knew the administration was not prepared for the implementation, but this pattern of continued delay and disarray is especially disappointing,” Graves said in a statement.
National Public Radio: Small Businesses Get One-Year Delay In Health Insurance Process
By Bill Chappell
The Obama administration announced it is delaying until November 2014 a requirement that small businesses shop for health insurance via the troubled federal HealthCare.gov site, which has been blamed for many problems since its launch last month. The shift applies to businesses with fewer than 50 full-time workers. After the delay was announced, Republican Rep. Sam Graves of Missouri, chairman of the House Small Business Committee, had this to say: "If small firms failed to provide services this frequently, they would be fired."
By Kent Hoover
The Obama administration announced a one-year delay in small businesses' ability to enroll for health insurance through HealthCare.gov, the federal government's troubled online exchange. "Today's news of yet another last-minute delay is just more proof that the law is unworkable and bad for small businesses," said Rep. Sam Graves, R-Mo., who chairs the House Small Business Committee.
By Gabrielle Karol
Small businesses looking to shop online for health insurance will now have to wait another year. Perhaps the strongest reaction came from House Committee on Small Business Chairman Sam Graves (R-MO). “In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today’s news of yet another last minute delay is just more proof that the law is unworkable and bad for small businesses,” said Chairman Graves.
Bloomberg BNA: Delay in ACA Small Business Enrollment Disappoints Industry
November 27, 2013
The Obama administration is again delaying the online enrollment for small businesses through the federally operated health insurance marketplace, a Department of Health and Human Services official confirmed Nov. 27. Rep. Sam Graves (R-Mo.), the chairman of the House Small Business Committee, said in a Nov. 27 statement, “In the midst of the angst and uncertainty that small businesses and Americans feel about Obamacare, today's news of yet another last minute delay is just more proof that the law is unworkable and bad for small businesses. If small firms failed to provide services this frequently, they would be fired.”
By Tom Howell Jr.
The Obama administration on Wednesday announced a major delay to the new health care law, this time putting off by one year the online mechanism that lets small businesses shop for plans through the federal Obamacare marketplace. Rep. Sam Graves, Missouri Republican and chairman of the House Small Business Committee, said that “another last-minute delay is just more proof that the law is unworkable and bad for small businesses.”
House Small Business Committee Chairman Sam Graves (R-MO) released the following statement regarding Small Business Saturday:
“Small Business Saturday helps raise awareness of the importance of small businesses on the U.S. economy and their value to every community in America,” said Chairman Graves. “Our nation’s 28 million small businesses play an integral role in our national and local economy, and we should remember their impact on our everyday lives. As we celebrate Thanksgiving, let’s all be thankful that we live in a nation where a free enterprise system fosters entrepreneurship, allows for economic mobility, and creates opportunities for Americans.”
On November 13, Chairman Graves introduced a bipartisan resolution in the U.S. House of Representatives to designate a Small Business Saturday. The resolution encourages Americans to shop locally at small businesses in their communities, particularly suggesting November 30, 2013 – the Saturday after Thanksgiving. Stores and other businesses throughout the country traditionally experience a major upswing in economic activity the weekend following Thanksgiving Day. Since 2010, Small Business Saturday has emphasized a “shop local” theme that follows “Black Friday.”
Small businesses make up 64 percent of net new private-sector jobs. From 1992 through 2010, small businesses outperformed large firms in net job creation about 75% of the time. They are also our nation’s primary innovators – small businesses produce 16 times more patents per employee than large firms.
The hearing explored whether distinctions between startups and traditional small businesses necessitate different policies, and the need to better define startups. Though there is no comprehensive and singular definition for the term “startups,” the term broadly encompasses young firms capable of creating scalable growth. High-growth startups are part of a changing entrepreneurial landscape that, even before they are profitable, can add economic vitality by hiring skilled employees and bringing new products to market. Most of these startups, 87 percent according to a survey by the Silicon Valley Bank, plan to hire in 2013, compared to just nine percent of established small businesses planning to hire in the slow economy, according to the National Federation of Independent Business.
“Successful startups generate new jobs at a remarkably high rate, averaging 27 new jobs in a year,” said Chairman Graves. “Startups are essential to a strong economic recovery, and policies should facilitate these efforts. That begins with broadening the understanding within the federal government of who these young fast-growing businesses are, what makes them successful and the pitfalls of regulation or lack of capital. We heard some great insights today on how these companies are being built and how the government can encourage startups.”
Materials from the hearing are available on the Committee’s website HERE.
Allison Lami Sawyer, CEO and Founder, Rebellion Phononics, Houston, TX, said, “Over three years ago, Robert Kester and I founded Rebellion Photonics around the technology he and his colleagues created using a federal research grant. Within the past two years we have created 7 jobs, raised $1.1 million in venture funding, become cash flow positive, and created products that truly make the world a safer place.”
Adam Arredondo, Co-Leader, Kansas City Startup Village, Kansas City, KS, said, “No startup aspires to only become a small business. Startups want to scale rapidly. Startups want to become the next big thing. Startups want to disrupt the status quo. Startups want to innovate.”
Anton Gelman, CEO, Cont3nt, Dulles, VA, said, “The goal of a startup is to test a hypothesis that should take this idea worldwide and try and dominate a market segment previously un-or under-addressed. Their growth is never linear (if it is, they are dead); it is either exponential or out-of-business. As a consequence they tackle big problems, run on intellectual property, and build jobs faster than is possible in any other industry.”###
Committee to Hold Hearings on Startups, Federal Motor Carrier Hours of Service Regulation
WASHINGTON, DC – The House Small Business Committee, chaired by Rep. Sam Graves (R-MO), today announced the schedule for the week of November 18, 2013:
On Wednesday, November 20, at 1:00 p.m., the House Small Business Committee will conduct a hearing titled The Startup Movement. The purpose of the hearing is to examine the importance of startups to the economy, and whether distinctions between startups and small businesses necessitate different policies.
“Small businesses, and startups in particular, are the key to our job creation,” said Chairman Graves. “On average, fast-growing young companies create about twenty-seven jobs per year. I look forward to hearing from our innovative panel on how they have been successful in creating jobs and what policies may further rapid growth.”
On Thursday, November 21, at 10:00 a.m., the Subcommittee on Contracting and Workforce will conduct a hearing titled WRONG WAY: The Impact of FMCSA's Hours of Service Regulation on Small Businesses. The purpose of the hearing is to examine the economic and operational impact of the Federal Motor Carrier Safety Administration’s new hours of service regulation on small businesses, particularly those in the commercial freight and transportation logistics industries.
“Trucking is critical to commerce in our economy and more than 97 percent of our nation’s commercial motor vehicle carriers are small businesses. Many more small companies and jobs rely on trucking each and every day. However, even though highway accidents involving commercial motor vehicles declined by more than 29 percent under the agency’s previous hours of service regulations, FMCSA went ahead with new regulations that are causing negative economic and operational impacts on the trucking industry and which may also be undermining highway safety by encouraging more driving during peak hours,” Rep. Hanna said. “I look forward to learning from the witnesses how they are operating under this rule and examining how we can better balance the needs of our economy and the important goal of highway safety.”
Watch both hearings live HERE
Wednesday, November 20, 2013, 1:00 p.m. EST
2360 Rayburn House Office Building
House Small Business Committee
The Startup Movement
Thursday, November 21, 2013, 10:00 a.m. EST
2360 Rayburn House Office Building
Small Business Subcommittee on Contracting and Workforce
WRONG WAY: The Impact of FMCSA's Hours of Service Regulation on Small Businesses
House Small Business Committee Chairman Sam Graves (R-MO), House Veterans Affairs Committee Chairman Jeff Miller (R-FL), Rep. Richard Hanna (R-NY), and Rep Mike Coffman (R-CO) today made the following statements regarding this week’s Washington Post investigative special report regarding the Department of Veterans Affairs’ (VA) contracting certification processes and abuses by several contractors:
“The Washington Post’s investigative report alleges an appalling abuse of taxpayer money,” said Chairman Graves. “The VA does a lot of good things, but determining if a firm is a small business is not one of them. I look forward to passing the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013, so that we can prevent these abuses. The Small Business Committee is also carefully examining these issues to determine if the Small Business Act was violated. We are preparing document requests for the relevant agencies and their response will inform our future actions.”
“VA should be leading the way when it comes to compliance with federal Service-Disabled Veteran-Owned Small Business (SDVOSB) contracting rules," said Chairman Miller. "Instead, the department’s actions outlined in this report serve as a shining example of what not to do. Almost as disturbing as VA’s behavior are the pathetic excuses it offers for not verifying the sizes of the ‘small’ businesses the department endorses. VA’s budget has nearly tripled since 2001, so if the department lacks enough contracting officers to conduct proper due diligence, VA leaders have no one to blame but themselves. Abuse of SDVOSB rules is an ongoing concern for the committee, and we expect a full explanation from VA in the coming weeks regarding the steps it plans to take to remedy this situation.”
“Each time a business that isn’t small takes opportunities intended for small businesses, the procurement system is cheated of the competition, innovation, and job creation that legitimate small businesses bring to the table,” said Rep. Hanna. “I intend to use my subcommittee to investigate ways to prevent fraud like that alleged in the Washington Post story, so that taxpayers can have confidence that their money is being spent wisely.”
“I introduced the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013 exactly to address fraud like this,” said Rep. Coffman. “The Washington Post report proves that the procurement system is vulnerable to manipulation, since VA admits it isn’t looking at whether the firms it verifies are small businesses. As a Marine Corps combat veteran, it’s embarrassing that abuses like this are taking place.”
Hanna is Chairman of the Small Business Subcommittee on Contracting and Workforce. Coffman is Chairman of the Veterans’ Affairs Subcommittee on Oversight and Investigations.
In July, Coffman introduced the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013 (HR 2882) to reform the SDVOSB procurement programs and save taxpayer money. This legislation is cosponsored by Graves, Miller, and Hannah.
Currently, the Small Business Administration (SBA) and the VA operate procurement programs for SDVOSBs, however, differences in the definitions, processes and interpretation between the agencies cause inconsistent decisions as to which firms qualify for contracts. A SDVOSB can qualify at one agency and not another for procurement preferences. This inconsistency often adds cost, confusion, and opens the door to fraud. HR 2882 transfers the VA business certification and verification process to SBA, unifies the definitions of SDVOSB and Veteran-Owned Small Business (VOSB), and adds transparency and predictability to the process by creating an appellate process by which a SDVOSB can challenge an agency decision.
Small Business Committee Chairman Sam Graves (R-MO) today introduced a resolution to designate a Small Business Saturday and express support for America’s 28 million small businesses.
The bipartisan Graves resolution encourages people to shop locally at small businesses in their communities, particularly suggesting November 30, 2013 – the Saturday after Thanksgiving. The designation of a Small Business Saturday by Congress helps raise awareness of the impact of small businesses on the U.S. economy and the value of thriving small businesses to every community. Stores and other businesses throughout the country traditionally experience a major upswing in economic activity the weekend following Thanksgiving Day. Since 2010, Small Business Saturday has emphasized a “shop local” theme that follows up the “Black Friday” advertising of major retail outlets.
Small companies are often highly innovative, and account for half of America’s economy. An overwhelming 93 percent of Americans recognize the importance of supporting small businesses.
“Small Business Saturday is a great way to say ‘thank you’ to a small business near you, especially during the holiday shopping season,” Graves said. “America’s small businesses help define what communities are all about. Small firms create seven out of every ten new jobs, and employ nearly half of all private sector employees in the United States. Small businesses make a big difference in our nation’s economy and their growth is essential to a stronger recovery."
Rep. David Cicilline (D-RI) and Rep. Jaime Herrera Beutler (R-WA) are original co-sponsors.
Subcommittee to Hold Hearing on Small Business Self-Insurance
WASHINGTON, DC – The House Small Business Committee, chaired by Rep. Sam Graves (R-MO), today announced the schedule for the week of November 11, 2013:
On Thursday, November 14, at 10:00 a.m., the Small Business Subcommittee on Health and Technology, under the chairmanship of Rep. Chris Collins (R-NY), will conduct a hearing titled Self-Insurance and Health Benefits: An Affordable Option for Small Business? The purpose of the hearing is to examine the trend of small businesses choosing to self-insure to cover their employees rather than purchase health benefit plans from insurers. The hearing will also examine whether changes to the health care marketplace, including the implementation of the health care law, are influencing these decisions.
“According to Gallup, the cost of health insurance is the top concern for small business owners. Choosing to self-insure is an option that may help small business owners lower their cost for providing health insurance,” said Rep. Collins. “I look forward to discussing self insurance options with our witnesses and examining whether the implementation of the health care law is having an impact on the number of small businesses who choose to self-insure.”
Watch the hearing live HERE.
Thursday, November 14, 2013, 10:00 a.m. EST
2360 Rayburn House Office Building
Small Business Subcommittee on Health and Technology
Self-Insurance and Health Benefits: An Affordable Option for Small Business?
House Small Business Committee Chairman Sam Graves (R-MO) today wrote to Health and Human Services Secretary Kathleen Sebelius asking for clarification regarding the Small Business Health Options Program (SHOPs) online enrollment timetable, and to express concern about the narrow timetable for small businesses to act. Recent comments from Obama administration officials have added more confusion as to when small businesses can begin enrolling in the program, and a rushed process could give small businesses only about two weeks to decide and register for plans.
Graves wrote in the letter, “…a September 26, 2013 Department of Health and Human Services press release promised that ‘[A]ll functions for SHOP will be available in November and employers and employees enrolled by December 15, 2013, coverage will begin Jan. 1, 2014. And, most recently, before the House Ways and Means Committee on October 29, 2013, Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner was asked if the SHOP website for small businesses that was delayed would be fully functional during November. Administrator Tavenner responded, ‘Yes, we will institute the SHOP component at the end of November,’ signaling a further delay. But on September 26, 2013, White House Press Secretary Jay Carney clarified in a press briefing that “…[small businesses] will be able to enroll, if you will, for these programs beginning November 1st.”
With regard to the narrow timetable for small businesses to enroll, Graves continued, “However, if the SHOPS will not be operating until November 30, 2013, and, as Administrator Tavenner testified, small business owners must enroll by December 15, 2013 for policies to be effective on January 1, 2014, that leaves precious little time – a mere 16 days -- for an already busy and burdened small business owner to learn about various insurance plans and make a decision so that they have coverage in place on January 1. The situation may be even more urgent for employers who are being informed that their current policies are being cancelled due to the law’s requirements. The numerous and well-publicized website problems that are reportedly causing consumers, including small business owners, to be ‘timed out’ of website sessions, blocked from even creating an account that may allow them to learn about and compare plans and premiums, will cause this process to be even more difficult.”
Through the Committee’s interactive website, Small Biz Open Mic, a small business described the impact of a confusing enrollment timetable. On October 22, Nancy Williams, of Harkness Industries in Cheshire, CT said, “The delays in getting rates to employers will mean that we don't have enough time to make a well-considered decision on what to offer (if anything) to our employees. I spend more time on insurance issues than I do on running my business. How is this better for anyone?”
This latest confusion adds to a list of problems and perplexing changes for the SHOPs. Many of the issues were predicted months ago. In June, a GAO report requested by Chairman Graves confirmed the administration was ill-equipped for the implementation of the SHOPs, showing potential for “implementation challenges going forward.”
To read the full letter, click HERE.
On September 26, the Department of Health and Human Services announced the Small Business Health Option Program (SHOP) online enrollment would be postponed from October 1 until November. That same day, White House Press Secretary Jay Carney clarified the enrollment would begin on November 1. However, during a Ways and Means Committee hearing yesterday, Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner said the SHOPs would be instituted at the end of November.
“As if small businesses didn’t have enough to deal with in an uncertain economy, they now must find time to comply with the maze of health law regulations and requirements, and figure out when the Small Business Health Options Program will actually be available for them,” said House Small Business Committee Chairman Sam Graves (R-MO). “With a purchase deadline of December 15, small businesses could have as little as 16 days to enroll in SHOP plans. For those who are receiving notice that their current plans are being cancelled under the law, the matter is even more urgent. This law’s rocky enrollment rollout is creating more stress and uncertainty for many Americans and small businesses, and this latest confusion adds to a growing list of frustrations.”
The SHOPs has experienced multiple problems this year. In the Spring, the Department of Health and Human Services postponed the employee choice plans in the SHOPs until 2015, forcing small employers in states with federally-operated exchanges to offer only a single plan for their employees. This move severely limited the breadth of choices that were originally envisioned, which could lead to increased premium costs. The problems were predicted months ago and should have been addressed instead of glossed over. In June, a GAO report requested by Chairman Graves confirmed the administration was ill-equipped for the implementation of the SHOPs, showing potential for “implementation challenges going forward.”
The rollout of the president’s health law has been riddled with many delays, mistakes and problems. A June GAO report, requested by House Small Business Committee Chairman Sam Graves, specifically stated the Small Business Health Option Program’s (SHOPs) implementation delays and missed deadlines showed potential for ‘implementation challenges going forward,’ yet the Obama administration decided to move forward anyway. Even though online enrollment for the SHOPs has been delayed until November 1, many small businesses are uncertain and worried about their enrollment requirements and higher costs. Regulations and uncertainty are normally cited as a top threat to small businesses, according to numerous polls and surveys.
“Joshua Strickland who owns a small business in North Carolina spent two weeks trying to get on the Affordable Care Act site and couldn’t so he went to his own insurance company Blue Cross Blue Shield. The results, no matter which way he goes he’ll be paying much more.”
CNN: ObamaCare Sing-Up Snafus
“Despite outreach and education attempts on the part of the Obama administration, small-business owners continue to express confusion regarding the SHOP exchanges.”
Fox Business: Tech Glitches, Confusion on Day 1 of SHOP Exchanges
“…local businesses owners are concerned about the changes the new law brings.”
WECT: Business owners raise concerns about Affordable Care Act
“Getting add-on sites up for Spanish-speaking users and small business employees could be the next key test for the Obama administration.”
Bloomberg News: Feds seek cure to Obamacare glitches as debut for Spanish-language exchange looms
“Since learning of these increases, Extreme Dodge Chrysler Jeep of Jackson has debated whether it can afford to continue offering health care to employees, said Mark Trudell, the dealership’s general manager.”
Lansing State Journal: Businesses brace for Obamacare
But the implementation concerns aren’t new. The June GAO report signaled that the SHOP’s were not ready for prime time.
Key findings from the GAO Report:
• Large number of exchange and SHOP activities weren’t completed. GAO found that, “…certain factors, such as the still-unknown and evolving scope of the exchange activities to be performed in each state by CMS, and the large numbers of activities remaining to be completed—some close to the start of enrollment—suggest a potential for implementation challenges going forward.”
• A key SHOP program to provide outreach and assistance to small employers and employees was delayed. GAO found that “[f]unding awards and development of a training curriculum for a key SHOP program that will provide outreach and enrollment assistance to small employers and employees has been delayed by about 2 months.”
• Core functions of both federal and state-based exchanges have yet to be completed. According to GAO, “[The Center for Medicare and Medicaid Services] (CMS) has many key activities remaining to be completed across the core exchange functions – eligibility and enrollment, including development and implementation of the data hub; program management; and consumer assistance.”
My husband and I own a small manufacturing company. We have contributed more than 50% towards our employees health insurance premiums for over 10 years. We have absorbed double-digit increases in premiums and offered high deductible plans in order to allow our employees and their families to be covered at a manageable cost. The plan that we offered in 2013 is considered "non-compliant" with the ACA. A "comparable" plan that is compliant will result in an average 27.9% premium increase for 2014. We cannot afford our portion and my employees cannot afford theirs. The delays in getting rates to employers will mean that we don't have enough time to make a well-considered decision on what to offer (if anything) to our employees. I spend more time on insurance issues than I do on running my business. How is this better for anyone?
Nancy Williams (Cheshire, CT) Harkness Industries, October 22, 2013
We've been told to expect our health care premiums to jump 50% next year. Normally our plan year begins June 1st. We've been able to launch our next plan year Dec. 1st of this year . . . meaning we should see a delay in this huge increase until we renew, Dec. 1st of next year. But my problem is more basic. Why is the government trying to get involved in healthcare? Does it think a group of bureaucrats are smarter than the free enterprise system? Why do they think it will be more efficient? What incentive does the bureaucrat have to do things more efficiently, or better? Look at the roll-out of the website. A disaster. A private company would go out of business. The government simply pours more money into their mistake until they get it fixed. What a mess.
Rick Jory (Highlands Ranch, CO) Sandhill Scientific, Inc., October 22, 2013
I own a small home healthcare business and am being crushed by the incredible burden of unnecessary regulations and requirements, taxes and fees. I could go on and on in excruciating detail about the devastating effects the ACA will have on my business, like all other small business owners. But the most demoralizing and paralyzing hurdle and effect the Obama administration has on me and my business, is when I watch the abuse of power they exert us by their deliberately wasting our money, promoting their incompetence, creating our dependence, dividing our strengths, exploiting any crisis, shirking their responsibility, unethically enforcing our rule of law and cowardly avoiding American and international leadership. If any of us ran our businesses under those principles...we would be out of business, fined and in prison. No small business owner will take risks under the current administration.
Mark Wells (Las Vegas, NV) InHomeCare.com, October 22, 2013
I consider myself to be extremely fortunate in that I have a very good insurance plan for the company. Our insurance provider has fortunately offered us a chance to renew our current group policy as of December 1st, thus delaying any ObamaCare requirements until late next year when things may be a little clearer. I have looked at the SHOP web site and it looks like it is going to be very painful. I am sure the result of all of this will be terminating group coverage for employees when the policy comes up in December 2014. Given that if we offer a policy that employees choose not to go with that the employer can be penalized - which may or may not apply to under-50 employee small businesses - it seems an obvious choice to limit the liability. Which is what I believe all businesses will be forced to do in the near future.
Paul Crowley (Davenport, IA) InfinaDyne, October 22, 2013
ObamaCare is a perfect example of government gone wild with other people’s money. I employ less than 50 people and provide good health insurance policies to all full timers even though I am not required to do so. These are BCBS policies with low out-of-pocket expenses. Every one of my employees has recently received a letter informing them that their policies will be cancelled because they do not conform to "government guidelines". As we begin to look at replacement policies, we see that both monthly costs and out of pocket expenses with both skyrocket. I will have to cap my contribution and pass all extra burden on to the employee. This will definitely hurt every one of them. This is a totally absurd government monstrosity.
Scott Marsh (Ijamsville, MD) Denovo Biotechnology, October 22, 2013
After 27 years I simply cannot figure out how to keep the doors open without drastic cuts in payroll and benefits. Friday I laid off 20% of my employees.. no, FRIENDS. Those are PEOPLE for heavens sake! With Families!, Your interference in the market place on virtually every front is so disruptive (not to mention disheartening) thousands of us won't survive. And, it absolutely galls me to throw my employees (whom I’ve provided health insurance for all these years) out onto the exchange that can't even accept their applications. Don't lie to me about covering the uninsured-you have created the uninsured!
Louise Peters (Anchorage, AK), October 22, 2013
The Affordable Health Care act will definitely have a negative impact on our small business. We started feeling the effects with the latest health rate increase along with adding employees during open enrollment. I am not sure if next year, when the rates are raised again, if we will have the profits available to afford health benefits. We need to provide benefits to entice good employees and must provide raises to keep them. Small business owners are not wealthy. We are taxed to death is what is really happening. No profits, no growth, no raises, how do we grow the economy with that mentality? The government needs to work together for the good of the people.
Debbie Peacock (Mesa, AR) FDI, October 22, 2013
As a small employer, we are trying to do what is right for our employees by offering benefits. There is no option available through the ACA and exchanges that comes close to lining up with the coverage we offer our employees, so losing that group coverage would cause hardship to our employees and their families. We cannot continue to absorb the increased costs and therefore, will be forced to pass these additional taxes through to our employees increasing the amount they must pay for insurance. What happened to "there will be no new taxes and no additional cost" to implementing the ACA? How are small businesses supposed to compete with the large corporations for top talent if we can't afford to offer benefits? When did the definition of benefit (something offered voluntarily by an employer to an employee in addition to wages) change to mean an entitlement (something expected and sometimes legislated)?
Recognizing the importance of entrepreneurs’ feedback in the process of shaping the very policies that will help determine their business sustainability and growth, Chairman Graves launched Small Biz Open Mic in September of 2011.
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