Good news from NFIB survey

Good news from our friends at the National Federation of Independent Business (NFIB) even if they don’t think it is good news.  According to a non-random survey of 921 small business owners and operators released today by the NFIB, “64 percent reported that they pay more for insurance premiums per employee in 2013 than they did in 2012.”

This is great news!  No one was predicting that Obamacare would result in actually a decrease in health insurance premiums for small businesses.  The best hope was that the double-digit increases of the past 15 or more years that almost all small businesses were experiencing would be less prevalent and that many small business would find insurance even less costly because of the health insurance tax credits made available through Obamacare.

Now, even the Obamacare-hating NFIB is admitting that 36% of their selected small businesses are paying less in premiums in 2013 compared to 2012.  The NFIB doesn’t give us a lot of detail about the increases that were experienced but we should assume that that is also good news for the Obamacare effect.

Here is how the NFIB report dealt with the rate increase issue: “36 percent of those under 20 employees saw premium rate increases of less than 10 percent last year (when they experienced increases) compared to 45 percent among firms over 20 employees.”

So let’s make the assumption (and that’s dangerous) that 36% of businesses with fewer than 20 employees and 36% of businesses with 20 or more employees had no premium increases.  That would mean that more than 50% of all the small businesses in this survey had no increase in premiums or an increase less than double digits in 2013 compared to 2012. 

This is an outstanding improvement over pre-Obamacare rates for small businesses.  And this does not count possibly even better small business rates that these companies might find in the SHOP program of the Health Insurance Marketplaces when they are open.

Thanks, NFIB, for this good news.  We’re heading in the right direction for small businesses.

NFIB's big business funding revealed again

Last July I had an opinion editorial in The Hill’s Congressional Blog entitled, “Big money behind misinformation on healthcare law”.  It talked about the revelations of big donor money flowing to the National Federation of Independent Business (NFIB) to fight against the Affordable Care Act (Obamacare). 

According to a Public Campaign analysis of IRS 990 filings from the NFIB and NFIB Small Business Legal Center for 2009-2011, the NFIB organizations have had dramatic increases in contributions since the Affordable Care Act was passed in 2010. But the new-found wealth is not from dues of the average NFIB member. The IRS filings show that the NFIB organizations received $10 million from just 10 contributors in 2010-2011. In the previous year the largest individual contribution was just $21,000. News reports have identified the conservative and superpac Crossroads GPS as one of the NFIB contributors in 2010 giving $3.7 million.

The fact that the NFIB is just a front group for big business and partisan interests, a small business pretender organization I have called it, is well documented.  Yet much of the media amazingly still rushes to the NFIB for its position on small business issues. 

Hopefully the latest news about where the NFIB gets it funding will finally make the press wake up about this faux small-business organization.

The National Journal reported yesterday that the NFIB’s efforts to stop a new tax on health insurance companies that will help pay for implementation of Obamacare is being funded by the big insurance industry group America’s Health Insurance Plans to the tune of $850,000.

It took a lot of comparing tax filings by Chris Frates of the Journal to uncover the secret deal.

The back-channel spending shows how insurers were able to fund a key—and much more politically popular—ally in their fight against the premium tax. After all, helping small businesses is a political no-brainer while aiding big insurers is a political nonstarter.

Here is the bottom line.  The NFIB does not represent the interests of small businesses.  It represents the interests of its major funders….big corporations.

NFIB admits its position on Medicaid expansion will hurt many small businesses

The National Federation of Independent Business (NFIB) has strongly advocated that states not expand their Medicaid programs as allowed under the Affordable Care Act (Obamacare).  This wasn’t a business decision by the organization because expanding Medicaid will benefit small businesses as I have pointed out in opinion editorials (here, here and here).

Instead it was a partisan decision that has been part of the highly political NFIB’s opposition to Obamacare since before there even was Obamacare.  The NFIB was a prominent plaintiff in the Supreme Court challenge to the healthcare law and rails against it to this day.

But now that the NFIB has been politically successful in convincing most states to either outright reject expanding Medicaid or delaying the decision (only 22 states plus the District of Columbia have committed to the expansion), they are now trying to undo the damage to small businesses that their advocacy will spawn.

In a March 18^th letter the NFIB sent to the IRS, the faux small business organization admits that any state that follows the NFIB’s position against expanding Medicaid will result in many small businesses in that state with 50 or more full-time employees being subject to significant penalty fees for those employees who would have qualified for Medicaid.  Under Obamacare any businesses with these numbers of employees are required to either offer health insurance or pay a $2000 annual fee per employee if even one of the workers receives a health insurance premium subsidy within the new insurance exchanges.  However a penalty fee would not be paid on employees covered by Medicaid.

“A business should not face expensive penalties for state and regulatory decisions beyond their control,” the hypocritical NFIB whined to the IRS.  The NFIB wants the IRS not to levy the penalty fees on businesses in states that followed the NFIB’s own position on not expanding Medicaid.

This financial liability for not expanding Medicaid has been well known since the law was passed.  The NFIB simply chose not to share this information with the state legislatures and governors it apparently has so much sway over because it didn’t fit into their mantra of how “bad” Obmacare is.

Now the NFIB want the IRS to clean up its mess! 

Business Leaders Say Stop Using Bogus Definition of Small Business to Mislead Voters and Policy Makers

Washington, DC, October 10, 2012 ­­-- The American Sustainable Business Council (ASBC), which represents small- and medium-sized companies, calls on candidates for office to stop misleading voters with bogus data based on inaccurate definitions of small business. Specifically, a report commissioned by the National Federation of Independent Business (NFIB) and the U.S. Chamber of Commerce, implied a complete falsehood: that the top 3% of small businesses are responsible for more the 50% of jobs in the United States.

“I’m incensed that a candidate for office would use small businesses to mislead voters,” said Frank Knapp, Vice Chair of ASBC and CEO of the South Carolina Small Business Chamber of Commerce. “Small businesses are the engine of our economy, not a way to score points in a debate.”

In the first Presidential debate last week, much discussion focused on the potential impact of tax policy on small businesses. But there was a dispute over the definition of small business, stemming from the NFIB/U.S. Chamber report.

ASBC contends that careful reading of the report shows that attribution of jobs to small businesses was made not to the top 3 %, but to all businesses that the report the report defined as small. Therefore, the statement that the top 3% of small businesses employ 50% of US workers is false.

Further, the report’s definition of small business was itself erroneous:

·         The report defines a small business by its corporate tax structure (S-Corp, LLC, Sole

        Proprietorship) instead of the most common definition of fewer than 100 employees. 

·         The report incorrectly equates individuals with any amount of taxable business pass-through income from an S-Corp or LLC with small business owner/operators who make hiring decisions.

“Under this wrong definition of small business, all of the big accounting firms, with tens of thousands of employees each, and some massive global companies like Cargill, would be considered ‘small,’” said Scott Klinger, Tax Policy Director for ASBC. “It would be misleading to say you are proposing tax policy to help small business if you are using this definition.”

“NFIB claims to represent me, but I’ve never heard from them and they’ve never asked my opinion,” said Josh Knauer, President and CEO of Rhiza Labs. “My company was recently named one of Pittsburgh's 10 fastest-growing tech companies. We have directly benefited from the tax dollars that went into the research that created Internet technologies long ago. This country needs to invest more in basic research to plant the seeds for the next inventions that will change our lives in ways we can't presently imagine. I never hear the NFIB talk about that.”

Dean Cycon, CEO of Dean's Beans Organic Coffee, in Orange, Massachusetts, does know NFIB.  "They tried to get me to sign up with them,” he said, “but it was clear that they represented a political agenda, not a small business agenda. I told them to take a hike. So it was shocking to hear them quoted so much in the recent debate, as if they were some sort of neutral, authoritative body. They are neither."

The American Sustainable Business Council and its member organizations represent more than 150,000 businesses nationwide, and more than 300,000 entrepreneurs, executives, managers, and investors. The non-partisan council includes chambers of commerce, trade associations, and groups representing small business, investors, microenterprise, social enterprise, green and sustainable business, local living economy, and women and minority business leaders. ASBC informs and engages policy makers and the public about the need and opportunities for building a vibrant and sustainable economy.  www.asbcouncil.org

###

Editor’s notes:

The NFIB-commissioned report (July 2012) implies that job figures apply to business owners paying taxes in the top-two tax brackets (the top 3%). It cites an April 2011 E&Y report, which instead clearly says that all "flow-through businesses" employ 54% of the private sector workforce.

Since the issue is tax policy impact on small business:

·         The nonpartisan Joint Committee on Taxation estimated that only 3 percent of small business owners who pay pass-through taxes do so in the two highest income brackets. The Center on Budget and Policy and the Tax Policy Center have each reported that the percentage of business owners likely affected by the tax hike would be even smaller (CBPP), as low as 1.5 percent (TPC).

·         From the National Economic Council (White House report):

The 3 percent of “small business owners” who would see tax increases include many individuals who play no role whatsoever in running a business or who receive business income from “businesses” that have no employees.

The 3 percent includes:

•        Individuals who are only passive investors. A Treasury analysis found that on average “small business” filers with total incomes over $200,000 get less than a sixth of their total income from a business.

•        Individuals who obtain income from businesses that are not small or are only investment vehicles and have no employees. Contrary to claims that the tax increase under the President’s proposal would fall mostly on job creators, the same Treasury study found that only a minority of the filers with business income who would see a tax increase obtain any of that income from a small business with employees.

•        Law firm partners, hedge fund managers, and other highly compensated professionals who typically organize their businesses as partnerships. Over half of the 400 highest-income taxpayers in the country have some business income and therefore are counted in the 3 percent.12

•        Wealthy individuals whose “small business” is renting out their vacation home or other property.

 Contact: Bob Keener, 617-610-6766, bkeener@asbcouncil.org

 

Best quote from weekend talk-shows

I have to admit that I was envious when Mitt Romney cited the National Federation of Independent Business (NFIB) twice during last week’s Presidential debate.  The small-business pretender organization was effectively used by Mr. Romney to give credibility to his argument that allowing the tax rates on households with over $250,000 in income would cause small businesses to shed 710,000 jobs.

This estimate was based on a highly questionable report partially paid for by the NFIB.  I’ll address why this report is bogus when it comes to real small business tomorrow.

But the report’s integrity was strongly attacked on “Up W/Chris Hayes” Sunday morning’s show simply because it was commissioned by the NFIB.  Mr. Hayes said:

“The National Federation of Independent Business is essentially a right-wing interest group that is out there to destroy Democrats at every opportunity.  I don’t think that I’m overstating things when I say that….It is not an independent source in any way.”

Unfortunately, Mr. Hayes did not give a quick acknowledgement of other real small business organizations like the American Sustainable Business Council (ASBC) that do not agree with the NFIB.  Mr. Hayes knows about the ASBC and even knows me (I’ve met him in DC twice). 

Come on, Chris.  Throw us a bone.

NFIB's bogus poll

Two recent polls of businesses seem to show conflicting results:

“69% of small business owners and manufacturers say President Obama’s Executive Branch and regulatory policies have hurt American small businesses and manufacturers.”

“39% of small businesses say that President Obama is the most supportive candidate of small business, whereas only 31% say the same of Governor Romney.  And 28% are still not sure which presidential candidate is more suportive of small business.”

Sure the questions weren’t the same but the conclusions should be highly correlated.  If 69% of small businesses think that President Obama has been very bad for them, then we shouldn't expect 28% to be undecided and only 31% favoring Mitt Romney on the issue of which candidate is more supportive of small business.

So what happened?

The first finding was from a National Federation of Independent Business/National Association of Manufacturers (NFIB/NAM) poll released yesterday.  The second was from a George Washington University/Thumbtack (GWUT) poll released last week.

The NFIB/NAM poll surveyed businesses with 2 to 499 employees while the GWUT poll surveyed businesses with 1 to 499 employees.  What’s the difference?  A lot!

The GWUT poll analysis says that, “According to US Census data, 91.6% of small businesses have between one and five workers.  Another 3.8% have 6-10 workers, and 4.6% have over 11 workers.”  The authors of the GWUT poll insist that their respondents closely matched the Census data.

So how well did the NFIB/NAM poll do with keeping close to the Census data of size of businesses?  Not very well.

First, the NFIB/NAM poll didn’t include sole proprietors.  So their percentage of respondents with 5 or fewer employees (48%) was vastly underrepresented.   But while the truly small business owners were under surveyed, the NFIB/NAM poll over surveyed the larger businesses. 

The Census data, according to the GWUT poll, shows that 1.9% of businesses have 21 to 100 workers and only 0.33% of businesses have between 101 and 500 employees.  What were the percentages of NFIB/NAM respondents following into these categories?  18% had between 21 and 99 workers and 6% had 100 to 499 employees?

Here are the comparisons between the Census data and the sample used by NFIB/NAM.

Workers           Census             NFIB/NAM
1-5                   91.6%              48%
21-100             1.9%                18%
101-499           0.33%              6%

It doesn’t take an experienced researcher to conclude that the sample used in the NFIB/NAM poll was skewed in favor of larger businesses.  This alone should disqualify the poll as representing the opinions of small business owners.

But wait, there’s more.

All the respondents in the NFIB/NAM poll weren’t even business owners or presidents of the companies.  This poll included 22% of the responses that came from managers.  We have no idea who these managers were or what they managed.  It could have been the maintenance department as far as we know.  Yet the NFIB/NAM poll counts their opinions just as much as the opinion of real small business owners.

But don’t blame the polling company that conducted the survey for this pretty worthless “small business” NFIB/NAM poll…blame the organizations who called the shots on the sample, the questions and the interpretation of the results.  

The polling company’s representative was very careful in his released comments on the poll.   Bill McInturff states, “It’s clear that small business owners and manufacturers are becoming increasingly frustrated by the federal government’s inability to solve America’s economic problems.  Manufacturers place most of the blame squarely on policies coming out of Washington.” 

There you have it from the man who knows the intricate details of who was surveyed and exactly who said what in the NFIB/NAM poll.  He carefully did not say small businesses blame Washington (and by inference the President) for the economy.   He said “manufacturers”.

Obviously this poll was intended to mislead the public and politicians during the last weeks of the Presidential campaign.  The NFIB has once again shown that it really doesn’t represent the true small businesses of this country and it doesn’t mind letting the good name of small business to be misused by big business interests.  In fact, it is paid millions to do just that.  As I have said numerous times before, the NFIB is a small business pretender.

Fortunately, today a new website was launched (www.NFIBexposed.org) that will help the public, politicians and press lift up the curtain and see exactly who the NFIB really is and who’s bidding it is doing. 

Media correcting the lies

It is satisfying to know that persistence in correcting false information pays off. 

One of the on-going lies about Obamacare is that it imposes a tax on small businesses.  This lie has been told over and over by the National Federation of Independent Business (NFIB) that has taken millions of dollars from GOP-related organizations in order to attack the healthcare reform law.

GOP Vice-Presidential candidate Paul Ryan repeated this lie in his speech at the Republican National Convention Wednesday evening.  Fortunately the national media has heard the truth from those like me who want to see Obamacare successfully enacted. 

In a Washington Post story yesterday under the heading “The true, the false, and the misleading: Grading Paul Ryan’s convention speech” was the following.

Paul Ryan declared that the Affordable Care Act would impose “new taxes on nearly a million small businesses.” The Act changes taxes for small businesses in three ways. It provides a tax credit (pdf) to subsidize insurance coverage for which between 1.4 and 4 million small businesses are eligible. It imposes a tax on medical device manufacturers, of which there were only 5,300 (pdf) in the United States in 2007. Finally, it imposes an employer mandate on businesses that do not provide coverage, which will not affect (pdf) businesses with under 50 employees. Most small businesses, then, get a tax cut, and the number of small businesses facing tax increases is about five thousand, far under a million. Ryan’s claim is just false.

Unfortunately, GOP Presidential candidate Mitt Romney didn’t read the fact-checking reviews of Ryan’s speech because last night he gave an abbreviated version of the lie saying of President Obama, “His plan to raise taxes on small business won’t add jobs, it will eliminate them.”

But as for factual information about small businesses, a Gallup poll released this week shows “small-business-owner satisfaction is up sharply.”

…despite the challenges small-business owners face, 55% are extremely or very satisfied with being a business owner and another 29% are somewhat satisfied, for a combined 84% saying they are satisfied to some degree with being a small-business owner.

This doesn’t sound like all small-business owners have succumbed to the fear the NFIB and some politicians are trying to instill in them with lies about Obamacare.

 

NFIB exposed…again

The first time I mentioned Bill Dunkelberg in my blog was two years ago.  Mr. Dunkelberg is the chief economist of the National Federation of Independent Business (NFIB), Professor Emeritus of economics at Temple University and chairman of Liberty Bell Bank in New Jersey. 

Unfortunately, in spite of all those distinguished positions, Mr. Dunkelberg is not a very good prognosticator and certainly not a friend of the nation’s 30 million small businesses.

In 2010 he led the NFIB’s PR campaign against the Small Business Lending Fund the Obama Administration wanted to create in order to encourage community banks to start making small business loans.  Mr. Dunkelberg said that passage of the Lending Fund would lead to “bad loans” that would result in the same kind of financial collapse that resulted from the housing bubble.

Well, the Lending Fund was established and while it has not been a great success in getting banks to meet the demand for small business loans, we also haven’t heard about bad loans threatening the entire financial industry. 

Last week Mr. Dunkelberg’s credentials as a small business advocate for the NFIB were again on display in an interview on WHYY, a Philadelphia public radio station, along with John Arensmeyer, founder and CEO of the Small Business Majority.

Mr. Dunkelberg made it painfully clear who he and the NFIB consider worthy small businesses.  Although there are 30 million small businesses in the country, only 6 million have employees other than the owner according to Mr. Dunkelberg and “those are the ones we worry about” he said.  The other 24 million sole proprietors he dismissed as “little businesses”. 

In Mr. Dunkelberg’s ivory-tower world, almost all the 6 million small-business owners that the NFIB “worries” about would pay higher personal income taxes if the Bush tax cuts end as scheduled for individuals making over $200,000 or joint taxpayers making over $250,000 a year.  Amazingly Mr. Dunkelberg proclaimed, “200-thousand.  250-thousand.  It’s hard to make a lot less than that.”

What?

In a national survey conducted by Lake Research last December for the American Sustainable Business Council, Main Street Alliance and Small Business Majority, only 3% of small businesses with employees other than the owner self-reported family incomes of over $250,000.  That is right in line with all other polling on this issue. 

If Mr. Dunkelberg is so wrong about the incomes of the vast majority of small-business owners, what else is he and the NFIB wrong about?

How about the demand for small business loans?  Since Mr. Dunkelberg is the CEO of a bank he should be an expert on this?

In the radio interview, Mr. Dunkelberg said, “When I talk to all these bankers across the country and also at our bank we find that for the most part that nobody wants more money.  The reason is we have more firms that think the economy will be worse 6 months from now than think it will be better.  We have more firms that think that their real sales will be lower six months from now than it is today.  And we have virtually nobody who thinks it is a good time to expand.”

No small business wants to expand?  No small business needs a loan?  Sounds like a typical bank CEO who listens only to other bankers and wants to sit on his money waiting for the perfect, no-risk small-business loan application.

But at least NFIB’s own survey of its members backs up Mr. Dunkelberg’s opinion.  In May 91% of NFIB members self-reported that they had all the credit they needed.  Only 3% said that financing was their biggest problem. 

However another survey in May by the National Small Business Association found that 43% of its members have wanted loans in recent years but couldn’t get financing.  In June Sam Graves, Republican Chairman of the U.S. House Committee on Small Business wrote, “One of the biggest issues faced by small businesses today is the inability to access sufficient credit and capital.” 

Not only is there demand for small business loans, contrary to Mr. Dunkelberg’s assertion, some small businesses are actually getting the credit they need.  A Gallup poll back in February found that 15% of small businesses were hiring primarily because of the need to expand their business operations and increased consumer demand.  But still not all of even these businesses were getting as much financing as they wanted.  The poll found that one third of the small businesses hiring were adding fewer employees than they needed.

Additionally, the Gallup poll disagrees with Mr. Dunkelberg’s portrayal of small business pessimism.  “Right now, economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time,” said Gallup’s chief economist. 

So small businesses are looking for financing, some are expanding and optimism is returning.

All of this means one thing.  Mr. Dunkelberg and the NFIB do not represent most small businesses in this country. 

Maybe the 300 to 350 thousand small businesses the NFIB claims as members consist of all the 3% of small-small business owners that take home over $250,000 a year.  And maybe these NFIB small-business owners don’t need any financing and maybe they are terrible pessimistic. 

But one thing is certain.  They and the NFIB don’t represent the rest of us.  

Tidal wave of lies

There are three main things holding the small businesses back in North Carolina, says Gregg Thompson the National Federation of Independent Business (NFIB) in that state.  “One is regulations, one is health care and one is taxes.”

Mr. Thompson’s comments were part of a nine-state “Stop the Tidal Wave” anti-regulations campaign recently launched by the NFIB and its new national project, Small Businesses for Sensible Regulations (created one year ago and now with an unimpressive 1,333 members).  The effort will include paid advertising and, of course, a lot of fear mongering about how we’re all going to be washed away in a tsunami of federal regulations.  Not present regulations mind you.  But future, mostly unspecified regulations.  Are you scared yet?

To buttress their argument that regulations are the number one problem for small businesses the NFIB cites a February Gallup poll as one demonstrating that “regulatory burdens are a top reason why small businesses are not hiring at pace with previous years.”

But as most polls have shown, regulations are not the reason small businesses are not hiring.  It’s the lack of demand. 

Even the Gallup poll the NFIB references says that. 76% of the small-business owners Gallop polled who were not hiring said that they do not need any additional employees and 71% said they were worried that sales won’t justify adding employees.  “Companies typically hold back on hiring when the economy is weak and when their operating environment is not providing sufficient revenues or cash flows.  This appears to be the case right now,” said Dennis Jacobe, chief economist for Gallup.

However, 48% of the business owners not hiring did say they were worried about the potential cost of healthcare and 46% were worried about new government regulations.  But these were concerns about something potentially happening in the future, worries ginned up by the NFIB’s relentless politically motivated PR campaign against the Obama Administration.  Mr. Jacobe refers to these concerns as “exacerbating an already uncertain and difficult situation.”

In other words, lack of demand is the driver of lack of new jobs, not concern about regulations and healthcare.  If it were the latter, no small businesses would be hiring but the truth is that small businesses are leading the new job creation in this country. 

When Gallup asked small-business owners why they were hiring new employees, 64% cited increased consumer or business demand and 55% said that sales and revenues justify adding more employees. 7% even cited government tax incentives as the reason (you won’t hear the NFIB talking about that). 

So while the NFIB misrepresents the Gallup poll findings, Mr. Jacobe throws cold water on the NFIB bogus claim that small-businesses owners are shaking in their boots over future new regulations.  “Right now,” he says, “economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time.” 

This is exactly what the NFIB political machine is afraid of—small business optimism.  It must be stopped.  Thus their 9-state anti-regulation campaign built on distortion and lies.

Facts show Obamacare good for business

Thursday, Jul 26, 2012

The S.C. director of the National Federation of Independent Business continues his organization’s misleading information campaign about the new health-care law (“Replace health law with reforms that work,” Friday). As the president and CEO of the 5,000-member S.C. Small Business Chamber of Commerce and vice chair of the 150,000-member American Sustainable Business Council, I need to correct the record.

First, there is no health-insurance tax on small businesses. There will be a tax on insurance companies to help pay some of the costs of Obamacare; but the law also prohibits insurers from spending more than 20 percent of your premium dollars on administration, marketing, profits and taxes. Since most insurers already have reached this 20 percent threshold and will be refunding $4.3 million in premiums to S.C. small businesses by the end of this month, they will not be able to pass on any new taxes.

Nor will there be “new regulations that will crush small businesses.” Businesses with fewer than 50 employees, or 97 percent of all businesses, have no obligation to provide health insurance and therefore are not facing new regulations. But 45,560 small businesses in South Carolina with fewer than 25 employees can take advantage of the law’s health insurance tax credits, a number the NFIB calls “very few”.

The federation is correct in noting that businesses with 50 or more workers will have some shared responsibility for the health insurance of their employees. They must either provide insurance or pay a fee. It says this will be an incentive to businesses to remain small, and therefore the entire law should be repealed.

But 97 percent of businesses with 50 or more employees already offer health insurance, because they see it as a necessary part of their compensation package. So the NFIB wants to throw out all the benefits of Obamacare that do and will make health insurance more affordable for all of us because of its concern for one out of every thousand businesses that will have a shared-responsibility decision to make.

While no law is perfect, Obamacare is making health insurance more affordable for small businesses.

Frank Knapp Jr.

President & CEO, S.C. Small Business
Chamber of Commerce
Columbia

http://www.thestate.com/2012/07/26/2368153/facts-show-obamacare-good-for.html

Kudos to TV host

For years the National Federation of Independent Business has been the darling of the media.  The NFIB had successfully sold the story that they represented small businesses.  The organization had the money to get in front of the national press and reporters were happy to have an easy “go-to” group on small business issues.

All that has now changed since the NFIB was a lead party in the Supreme Court failed challenge to Obamacare (Affordable Care Act).  The truth about the NFIB’s source of funding and their support for big business positions on issues is now on the media’s radar.  Not only has the NFIB been the target of numerous national print stories challenging its “small business” credentials, even TV reporters are now not simply accepting the organization’s blustery talking points responses to questions.

This Sunday my friend John Arensmeyer, founder and CEO of the Small Business Majority, and Jean Card, VP of Media and Communications of the NFIB, were guests on MSNBC’s “Your Business”.  Host JJ Ramberg started out asking Ms. Card what was in the healthcare reform law that would adversely affect small businesses.

Ms. Card began her response with the typical NFIB misleading “facts” but was quickly stopped by Ms. Ramberg.  The host was not going to let her viewers hear that Obamacare was going to force small businesses to buy health insurance when the truth is that there is no health insurance mandate for small businesses with fewer than 50 employees (97% of all businesses).  Watch Ms. Ramberg push-back on the NFIB spokesperson here.

Congratulations to Ms. Ramberg for not being duped by the PR machine of the small business pretender organization, the NFIB.

Big money behind misinformation on healthcare law

The Hill's Congress Blog

June 29, 2012

By Frank Knapp, Jr., president and CEO, South Carolina Small Business Chamber of Commerce

I received a call from a gentleman, Ralph, this morning asking about my statement to the press yesterday regarding the Supreme Court ruling on Obamacare. He wanted to know why I thought the law was good for small businesses because he had heard so much about how it was going to be harmful.

I’m sure that Ralph had also read the statement by the South Carolina state director of the National Federation of Independent Business (NFIB) following the Supreme Court ruling in which he insists that now that Obamacare has been ruled constitutional there will be an “onslaught of taxes and mandates” on small businesses that will result in “job losses and closed businesses.”

It turns out that Ralph is retired living along South Carolina’s coast but he has a brother in Pennsylvania who owns a small business with less than 10 employees. I learned that his brother does offer health insurance to his employees. So it was natural for Ralph to be concerned for his brother’s business.

I don’t blame Ralph for being concerned. For over two years the NFIB has been misleading the small business community and public on this issue. The organization spent about $4 million in fighting Obamacare in the Supreme Court arguing that the law was unconstitutional. Now with that line of attack gone, all the NFIB has left is continuing to lie about what the law does.

So I explained to Ralph that businesses with fewer than 50 employees, which account for 97 percent of all businesses, do not have to offer health insurance to workers and will not be penalized if they don’t. Therefore there can be no job losses or closing of the doors for these small businesses due to Obamacare.

I also explained that there are no other taxes imposed on these small businesses but there are health insurance tax credits available to millions of small businesses like his brother’s who offer healthcare to their employees. “Do you think your brother could use some tax credits,” I asked Ralph. “I’m sure he can,” was the response.

I asked Ralph to have his brother call me so I could help him on the tax credit issue. I also thanked him for calling and told him that I wish I could have a civil conversation with everyone who has concerns about Obamacare. It has been my experience since the law passed in 2010 that when I have the opportunity to have such conversations with individuals or small groups, the fears fall away.

But the real question is why do supporters of the reform have to continue to correct the misinformation being spread by organizations like the NFIB which are suppose to represent small businesses. Why did the NFIB work so hard and spend so much money trying to kill a law that has already benefitted hundreds of thousands of small businesses that have received the tax credits and will help in other ways to make health insurance more affordable when the law fully goes into effect in 2014.

The answer is money.

According to a Public Campaign analysis of IRS 990 filings from the NFIB and NFIB Small Business Legal Center for 2009-2011, the NFIB organizations have had dramatic increases in contributions since the Affordable Care Act was passed in 2010. But the new-found wealth is not from dues of the average NFIB member. The IRS filings show that the NFIB organizations received $10 million from just 10 contributors in 2010-2011. In the previous year the largest individual contribution was just $21,000. News reports have identified the conservative and superpac Crossroads GPS as one of the NFIB contributors in 2010 giving $3.7 million.

It is clear that the NFIB is acting on behalf of its partisan big contributors and not their members such as Mike Roach. Mr. Roach is one of the small business owners receiving the tax credits. He owns Paloma Clothing in Portland, Ore, and is a NFIB member for 36 years. In March Mr. Roach told the United Press International that “tearing down the law won’t help us; it would hurt….repealing the Affordable Care Act would send us back to the Dark Ages of health insurance.”

So while the Supreme Court Ruling is the end of this story as to the constitutionality of Obamacare, it is not the end of the political story and certainly not the end of the NFIB lies that are intended to scare people like Ralph and his brother. That is what the NFIB is being paid to do.


Knapp is the president & CEO of the South Carolina Small Business Chamber of Commerce. He is also the vice chair of the American Sustainable Business Council.

Source:
http://thehill.com/blogs/congress-blog/healthcare/235665-big-money-behind-misinformation-on-healthcare-law

Obamacare delivers for South Carolina citizens and businesses once again

One important part of Obamacare passed in 2010 was a thing called the medical loss ratio.  Essentially it says that if at least 80% of the health insurance premiums collected by an insurance company do not go to paying for medical services then the policyholder is due a refund. 

As the story below indicates, South Carolinians can expect $19.6 million in premium refunds from their health inurance company.  Thanks to SCBIZNews.com for reporting this story. It appears that no one else did (except for me on my radio show yesterday).

But don’t be looking for your refund on overpayments of premiums if the National Federation of Independent Business succeeds in having the Supreme Court declare all of the healthcare reform bill unconstitutional.  If that happens next week, the insurance companies will just keep your money.

$19.6M in health insurance refunds due to S.C. consumers

The bulk of the refunds, about $15.3 million, will be going to 105,043 individual policyholders for an average of $227, the federal Department of Health and Human Services said. Another $4.3 million will go to small businesses that have group health plans.

By Chuck Crumbo
ccrumbo@scbiznews.com
Published June 21, 2012

About $19.6 million worth of refunds on health insurance premiums will be paid to S.C. individual policyholders and companies that provide the benefit, the federal Department of Health and Human Services announced today.

The refunds are being issued to meet the spending threshold established by the health care law, the agency said. Called the medical loss ratio, the threshold requires health insurers to spend at least 80% of premium dollars collected from individual policyholders and small businesses of two to 50 employees on health care, rather than business expenses. Carriers who write policies for large employers — those with 51 or more workers — must spend 85% of premiums on health care. In all cases, the insurance companies will be required to refund consumers.

In South Carolina, refunds will total $19,630,152 and will benefit 251,632 consumers, according to the agency. The average refund will be $131.

The bulk of the refunds, about $15.3 million, will be going to 105,043 individual policyholders for an average of $227, the agency said.

Another $4.3 million will be refunded to small businesses that have group health plans. The average refund for the group, which totals 145,401 employees, is $53.

Another $54,594 will go to large employers, the agency said. The group has 1,188 enrollees and the average refund will be $85, the agency said.

Fewer companies are in the large group market because most large employers are self-insured.

The refunds are to be mailed by Aug. 1, officials said.

An executive of BlueCross BlueShield of South Carolina, which has about 45% of the state’s share of health policies — individual and group — did not offer an overall total of refunds for consumers, but said refunds would average about $200.

Actual refund amounts will depend on terms of the plans and the length of time someone has been enrolled in the plan, said Jim Deyling, president of BlueCross BlueShield of South Carolina.

Humana, which is ranked among the state’s top five health insurance carriers, did not have a dollar amount on its rebates.

“I can tell you the company is preparing to issue rebates to policyholders (generally employer groups or members enrolled in individual Humana medical plans), where appropriate, by the Aug. 1 deadline,” said spokeswoman Nancy Hanewinckel.

For those enrolled in group plans, the refunds will be sent to the employer, Deyling said. It will be up to the employer to decide what to do with the money.

BlueCross BlueShield of S.C. serves about 10,000 firms in the small group market that will be eligible for the refund. None of the company’s large group clients will receive a refund because their medical costs exceeded 80% of premiums collected.

BlueCross BlueShield of S.C. has about 60,000 individual policyholders, he added.

According to the federal agency, the employer can:

• Send a check for the full amount to the employee.
• Provide a lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit or debit card.
• Offer a direct reduction in future premiums.

Before people run out and spend their rebates, Deyling said the issue could be moot if the U.S. Supreme Court throws out the health care law.

“If the federal law is struck down in total it’s as if the law didn’t exist,” Deyling said, noting that the court is expected to rule soon on the law. BlueCross BlueShield of S.C. then would have to decide what to do with the refund money.

“If they strike down the law then the rebates are null and void,” Deyling said. “What we are planning on doing is to take hard look at what we would do with regards to rebate. We could take the rebates and decide to reinvest them. Eventually, what’s going to drive our thinking on what action we can take is what’s in the best interest of all of our customers.”

For now, the company is “operating under the assumption that the law stays in place,” Deyling said.

http://www.charlestonbusiness.com/news/44289-19-6m-in-health-insurance-refunds-due-to-s-c-consumers