And the Beat Goes On…

John Arensmeyer

John Arensmeyer

Tax season is over, but our efforts to educate small business owners about tax credits in the new healthcare law are still going strong. While many small business owners took advantage of this important provision of the Affordable Care Act and claimed a credit on their 2010 taxes, others didn’t. Not because they weren’t eligible or didn’t think it was worth it, but because they didn’t know the credits exist.

Time flies, and before we know it small business owners will once again be plunking piles of receipts and reams of paperwork on their accountants’ desks in preparation for filing their 2011 taxes—which is why Small Business Majority and our partners are working so hard to inform the small business community about this issue now.  The tax credits are available for businesses that cover at least 50% of the health insurance premiums and have fewer than 25 full-time employees with average annual wages below $50,000. Small Business Majority has a tax credit calculator on our website to help small businesses determine whether they qualify.

Our staff is working with other small business and healthcare advocates in various states to educate entrepreneurs about the tax credits. In Maryland, we’ve teamed up with the Maryland Health Care for All! Coalition and CareFirst BlueCross BlueShield to spearhead a statewide campaign that encourages small businesses to take advantage of the tax credits. Today at a press conference in Salisbury, local elected officials discussed how they’ll continue to make sure the state’s small business owners know about the credits. As Lt. Governor Anthony Brown said, “These tax credits are just one of the many ways healthcare reform will help Maryland businesses access more affordable coverage for their employees, and we are fully committed to ensuring small businesses have the information they need to maximize every advantage that the Affordable Care Act provides.”

We’ve also hosted a series of webinars on the credits, reached out to tax professionals so they can help their clients claim the credit, and members of our staff have spoken at numerous conferences on this topic.

Our Vice President for Policy and Strategy, Terry Gardiner, was also recently featured in a video by the nonpartisan Alliance for Health Reform, detailing the nuts and bolts of the tax credits. You can view it here.

They say knowledge is power, but in this case it’s free money. We don’t want any small business owner to miss out on these credits a second time. So we’ll continue beating this drum because saving some cash is always sweet music to an entrepreneur’s ears.

Oregon Senate Exchange Bill Doesn’t Go Far Enough

John Arensmeyer

John Arensmeyer

The Oregon Senate voted today on SB 99, legislation that will create the state health insurance exchange. While lawmakers should be commended for their work implementing this critical component of healthcare reform, the bill as it stands has no teeth. It won’t give the exchange power to negotiate for lower insurance rates. Without this authority, small businesses won’t get relief from high premiums that harm their competitiveness, stifle economic growth and limit job creation. The State House should now work to enact an exchange that has the necessary negotiating power to lower premiums and help small business owners and those they employ.

For years, Oregon small businesses have suffered from skyrocketing health insurance premiums, often watching their healthcare costs double or triple in one year. This forces small employers to make tough decisions like forgoing coverage or passing off the cost to their employees. They’ve wanted elected leaders to find solutions to this problem, to rein in costs and to help create a more business-friendly economic environment.

State health insurance exchanges, or marketplaces, will bring some of the biggest savings to small business owners. An exchange that has the power to negotiate for lower rates would allow small business owners to join together to purchase health insurance at a lower price. Employers will be able to choose from a variety of plans that best meet their budget and needs, and won’t be subject to outrageous premium hikes like what we’ve seen year after year. It would increase choice and competition in the marketplace, and drive down health insurance premiums so small businesses can afford to cover employees without breaking the bank.

In Oregon and elsewhere, small business owners need all the help they can get. Oregon legislators have an opportunity to set an example for other states to follow and set up an exchange responsibly—one that has power to negotiate for lower rates and puts choice in the hands of individuals and small business owners, not insurance companies. They shouldn’t squander this chance to do right by Oregon small businesses.

Exchange Board Kicks Off California’s Health Insurance Marketplace

John Arensmeyer

John Arensmeyer

California made history on April 20 by being the first state in the country to hold an official meeting on the state health insurance exchange. The average person might find one board meeting insignificant—board meetings aren’t always the sexiest events, granted. But the policies this board makes will undoubtedly impact the average person’s bottom line, especially those of small business owners, which significantly increases its appeal and has our full attention.

The Affordable Care Act requires states to set up health insurance exchanges by 2014. California has become a national leader in this effort as the legislature passed, and former Gov. Schwarzenegger signed, legislation creating the state health insurance exchange last year. Taking such a significant step early in the process allows California ample time to work out the details on how the exchange will operate, which means the state’s small businesses will benefit from this careful planning through more choices and reduced healthcare premiums.

Our California Outreach Director, David Chase, attended yesterday’s meeting and reported back with some good news: the state has already received a $1 million planning grant to help set up the exchange, and the board voted unanimously to apply for an additional grant to help fund the establishment of the exchange. The board tentatively scheduled its next meeting on May 11 to discuss topics that may include a review of the grant application process, a discussion on the small group market in California and the requirements for the SHOP exchange. We’ll follow this and other developments closely and provide frequent updates as details of the exchange begin to emerge.

This is an exciting time for California’s small business community. The nation is watching, and if we do this right, other states will follow. Though we have a challenging road ahead, we should all be encouraged about this historic opportunity to lower healthcare costs for small businesses and the millions they employ.

Congress Playing a Dangerous Game with Debt-Ceiling Debate

John Arensmeyer

John Arensmeyer

If the Great Recession were a bad movie, who’d go back to see Part Two? Unfortunately, a scary sequel is just what some lawmakers might produce if they continue playing their dangerous game of chicken with America’s debt ceiling. “The Great Recession: The Sequel” would be an epic flop, wreaking havoc on our fragile economy and sending small businesses into a financial tailspin.

Congress is currently engaged in a debate over whether to raise the nation’s debt limit. This would allow the government to increase the amount of money it borrows so it can pay for expenses it incurs. Though nobody enjoys the thought of increasing the amount of money we owe to our creditors, the cost of not doing so, in the words of Federal Reserve Chairman Ben Bernanke, would be “catastrophic.”

We just witnessed a contentious debate over the federal budget, and now some in Congress are again playing politics — but this time with the debt ceiling. They are using the debate over raising the ceiling as leverage, demanding budget cuts in exchange for votes. To many this game of chicken might seem like more political posturing, but this time there could be devastating consequences just for playing.

First of all, if we don’t raise the debt limit, the United States would default on its loan obligations, and our economy would tank. It’s that simple. Even if that doesn’t happen, however, the very suggestion that we might default could be just as bad. Austan Goolsbee, chairman of the US Council of Economic Advisers, predicts that doing so could cause widespread instability in the credit markets.

And if the debt limit is not raised, Goolsbee added, America would witness “the first default in history caused purely by insanity.” A default would undercut any credibility the country has to borrow in the future, reverberating not only through the Treasury but also to banks of all sizes and ultimately to small businesses.

Small businesses already have a tough time applying and getting approved for loans from banks-and failing to raise the debt ceiling would make this problem go from bad to worse. Entrepreneurs would lose the ability to get loans to expand and hire new workers, to purchase equipment, or to make long-term investments critical to a company’s success, such as investments in clean energy. This is the guaranteed scenario if Congress doesn’t do its job. Interest rates would also spike, hurting small business owners where it matters most-their wallets. Higher interest rates means less cash for entrepreneurs trying to pay back a loan, stifling investments across the entire economy.

It’s time for leaders in Congress to work together to make responsible budget decisions that carry us through these uncertain financial times-not decisions that threaten to send us spiraling into another recession. We’ve already seen that bad movie. Let’s not be forced to watch an even worse sequel.

Lawmakers’ Sleight-of-Hand Tricks Threaten Small Businesses

John Arensmeyer

John Arensmeyer

Small business owners are a pragmatic group. They’re interested in the bottom line, both literally and figuratively, and when it comes to legislation, they want to know what a particular law means to their cash flow. And they want to hear about it in plain English, without florid prose and windy pronouncements.

Unfortunately, there are some lawmakers in Washington, D.C. who are making grandiose claims that they’re helping small businesses, when actually they’re using showy rhetoric to hide their attacks on small businesses to further their ideological agendas. And the bottom line is it’s got to stop.

The Senate has an opportunity to reauthorize the Small Business Innovation Research (SBIR) program — a program that provides critical investments in America’s small businesses and gives taxpayers a great return on those investments through job growth and economic expansion. Yet an amendment has been added to the SBIR legislation that, if passed, would halt implementation of the new healthcare law. Because of the amendment, there’s a fight brewing that puts the passage of the entire SBIR in jeopardy.

So in their attempts to derail the Affordable Care Act, which has tremendous benefits for small businesses, these lawmakers are threatening the SBIR program, another crucial part of entrepreneurs’ continued success. What this boils down to is that lawmakers are trying to have their cake and eat it, too.

Unfortunately, small businesses are being left with nothing but the crumbs.

If we stopped implementing provisions of the Affordable Care Act, small businesses would pay a hefty price. We commissioned a study by MIT economist Jonathan Gruber that found that without reform, small businesses would pay nearly $2.4 trillion in healthcare costs by 2018. The report went on to find that 178,000 small business jobs and $52.1 billion in small business profits would also disappear because of these costs. It doesn’t take a degree from MIT to understand that these numbers are too costly for small businesses.

We know from our research that the ACA is already helping small businesses. Nearly 84 percent of small businesses nationwide are eligible this year for a tax credit on their 2010 tax returns. Sharon Whalen, the publisher of a weekly newspaper in Springfield, Ill. has already seen tangible benefits. Sharon employs 10 people, yet like many other small business owners, she’s paid a pretty penny for coverage. The tax credits put an extra $2,700 back in her pocket this year to offset her costs. This helps her maintain coverage so she can continue to recruit top talent. And her story is just one of many. If we stop implementing the ACA, these tax credits will disappear, along with a host of other benefits that are giving small businesses relief from high healthcare costs.

Hindering the implementation of healthcare reform is bad for small business. Trying to accomplish that by tacking on an amendment to another piece of much-needed legislation, and delaying it in the process, is even worse. But claiming it’s being done for the sake of small business is a new low.

In a time when our entrepreneurs and our economy need help more than ever, lawmakers should drop the rhetoric and start focusing on small businesses’ bottom lines — instead of on their narrow ideological agendas.