Health insurance tax credits threatened

The opponents of health care reform are at it again. U.S. House Republicans saw their first general effort to repeal the Affordable Care Act (ACA), H.R. 2, go down in flames in the Senate. So now they are attacking a specific part of the ACA trying to undermine a popular benefit.

This week a House Subcommittee will take up H.R. 3, a bill set for priority by the Republican majority. They’re afraid that after many small businesses get sizeable tax credits for offering health insurance to their employees this year, more small business owners will realize the ACA was a good thing after all. So opponents are trying to make sure this doesn’t happen again in 2012, an election year.

The strategy is to take away the tax credits from small businesses or make the small businesses expend time, effort and, most likely, more money to keep the tax credits. Faced with more government intrusion and regulations, they hope to turn the tax credits into a liability for those who supported the ACA.

To do this they’re hiding behind the lofty goal of reducing the number of abortions. If the health insurance plan of a small business covers even one abortion related service (and most do), it would not qualify for the tax credits under H.R. 3.

Below is my letter to the Subcommittee and Committee that will take up H.R. 3. Feel free to share your thoughts with them also.

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March 28, 2011

The Honorable Dave Camp, Chairman
Committee on Ways and Means
341 Cannon House Office Building
Washington, DC 20515

The Honorable Sander Levin, Ranking Member
Committee on Ways and Means
236 Longworth House Office Building
Washington, DC 20515

The Honorable Pat Tiberi, Chairman
Subcommittee on Select Revenue Measures
113 Cannon House Office Building
Washington, DC 20515

The Honorable Richard E. Neal, Ranking Member
Subcommittee on Select Revenue Measures
2208 Rayburn House Office Building
Washington, DC 20515

Re: H.R.3

Dear Chairman Camp, Chairman Tiberi, Ranking Member Levin and Ranking Member Neal,

After decades of escalating group health insurance premiums and demands for Congressional action for relief, one year ago our smallest of businesses finally were given the opportunity for federal health insurance tax credits. Now H.R 3 threatens to erase this benefit for small businesses because it would eliminate the health insurance tax credits for any existing or new plans that provide coverage for abortion.

The problems H.R. 3 would cause for small businesses that are trying to do the right thing and offer health insurance have nothing to do with the ideological intent of this bill. Even if a small business owner were to agree with the intent, the cost in time, money and continuity of policy is very significant.

1. Small business owners do not have the expertise to closely examine healthcare plans to determine if abortion coverage is included. Such services are not labeled “abortion” but rather fall into numerous clauses in a health care policy from prescription drugs to outpatient surgery to maternity care that includes unforeseen complications. Small business owners are no more prepared to completely understand the fine print of their health insurance policies than are members of Congress.

2. Requiring a small business owner to try to understand the intricacies of their health insurance policies would require considerable time on their own or with an insurance agent (who also probably has no idea how to interpret the verbiage in the policy as it relates to abortion). Essentially H.R. 3 will cause a small employer to divert time from running the business. And if time is money, as we are all told, then H.R. 3 will be an increase in cost for small businesses offering health insurance.

3. Small businesses that finally determine that their health insurance policy does in fact cover even one abortion service will be financially punished in one of two ways. Either they can keep their present policy and lose thousands of dollars in hard won tax credits or they will give up their current health plan and most likely have to pay higher premiums for a new plan. The latter will result from both re-underwriting by a new carrier and adding provisions now required in any new policy. This is especially true since the health insurance exchanges will not be in place until 2014 to increase competition for this business.

H.R. 3 is simply a slap in the face to the millions of small businesses now offering health insurance to employees and eligible for the new tax credits. Targeting small businesses for such punitive action, while ignoring big businesses that also receive tax benefits when offering health insurance, demonstrates a callous disregard for the “backbone of our economy,” as members of Congress love to proclaim about small businesses.

Sincerely,

Frank Knapp, Jr.
President & CEO
The South Carolina Small Business Chamber of Commerce