NFIB malpractice

Soon we will find out how many small businesses in the country received health insurance tax credits for 2010—a benefit under the Affordable Care Act (ACA). The Small Business Majority estimated that there are approximately 4 million businesses with 2 to 24 employees that could qualify for the tax credits if they offered health insurance last year. And reports from major insurance companies indicated that more small businesses decided to offer health insurance specifically because of the tax credits.

But instead of cheering for the small businesses that will be receiving the federal government’s help in making health insurance more affordable, the National Federation of Independent Business (NFIB) made one last minute effort last week to tell small business what a bad deal the tax credits are.

Well, at least they’re consistent. The NFIB fought very hard against national health care reform. After the ACA became law, the small-business pretender organization signed onto the states’ lawsuit trying to have the ACA declared unconstitutional.

There’s nothing new in the NFIB’s inaccurate complaints about the ACA. But, what the heck, let’s have some fun. Here are some of their bizarre accusations:

1. Relatively few will qualify for the credit. So how many small businesses does the NFIB project qualified for the tax credits? 10,000, 30,000, 100,000? No. The NFIB says up to 2 million. 2 MILLION!!! The NFIB calls 2 million small businesses “relatively few”.

2. Calculating the credit may cost more than the credit itself. Come on! The NFIB is correct that a small business should seek a professional tax preparer to apply for the tax credit. Some information needs to be gathered and proper calculations made. But my accountant told me that he was pleased that the accounting requirements were easier than calculating other business tax credits. Small businesses will be getting possibly tens of thousands of dollars in tax credits to reduce the cost of health insurance. If their tax preparer charges more than that for the service, my advice is to find some different help next year.

3. The credit is unlikely to offset insurance cost increases. The NFIB admits that health insurance premiums for small businesses were escalating before the ACA but claims that the reform will pile on extra costs. Well, according to Vincent Capozzi, senior vice president for Harvard Pilgrim, the ACA has only caused premiums to increase one percent, primarily due to the requirement that preventive services have no out-of-pocket charge. Let’s see. An increase of premiums by one percent but getting a tax credit of up to 35 percent of premiums paid. Obviously the same PR genius at the NFIB who thought 2 million small businesses were “relatively few” also failed math.

But somone at the NFIB finally felt a need to respond to critics like me who have been saying that the organization has been committing malpractice for discouraging small businesses from taking advantage of the tax credtits.  So the NFIB ends its latest trashing of the tax credits with this—in red no less:

[CAVEAT: Despite our concerns with the structure of the credit and the criticisms written above, NFIB urges any small business to consult with an accountant to determine whether filing for the credit is a good idea. If they determine that filing is beneficial, then by all means the business should file and get whatever dollars the law will offer.]

Interpretation: “All the crap we’ve fed you for over a year, never mind.”