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.

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.

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.

 

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