Yesterday, House Democratic leaders released a sweeping health care overhaul bill with a strong endorsement from President Barack Obama, but they acknowledged they still have much work to do to bridge intraparty differences and get a bill passed by August. NFDA Advocacy staff has reviewed the House bill and have identified major areas of concern for small business owners.
 
At a cost of more than $1.2 trillion, the House bill seeks to insure an additional 37 million Americans over the next 10 years by introducing a public, government-run plan. About half of the cost for this massive overhaul effort is expected to come from reduced spending on federal health programs, primarily Medicare. However, much of the rest will come from a new surtax on families earning more than $350,000 a year and individuals earning more than $280,000. The taxes, which will take effect in 2011, will affect about 2.1 million taxpayers. The surtax will start at 1 percent and rise to 5.4 percent on incomes over $1 million. The highest tax rate will rise to 45 percent in 2011 (when the Bush tax cuts end). This new tax will place a huge burden on funeral home owners.
 
Of particular note to funeral directors and small business owners are new mandates related to employer responsibility for providing health care coverage for employees. Employers must reach certain thresholds when offering healthcare coverage to employees, or must pay government penalties.
 
If an employer chooses to provide health care coverage to employees, employers must offer all of his/her employees the option of selecting individual or family health coverage. Additionally, the minimum employer contribution is 72.5% of the premium for individual coverage, and 65% of the premium for family coverage, or a proportional amount for part-time employees. Certain small firms may get a tax credit equal to 50% of the amount paid for employee health coverage to help cover costs. However, this tax credit is phased out if an employer has 10 to 25 employees or if the employer's average wages are $20,000 to $40,000 per year. The relatively low thresholds for penalties place an additional undue burden on small family run funeral homes.
 
Employers who choose not to provide health insurance to workers will generally have to pay a penalty to the government. The fee will be equal to 8 percent of wages for an employer with an annual payroll of more than $400,000. Employers with payrolls between $250,000 and $400,000 a year will pay a smaller penalty, and those less than $250,000 will be exempt.
 
NFDA is part of a coalition of over 200 small business groups who have actively advocated for health care reform that helps to expands healthcare options for small business without placing burdensome and expensive mandates on small businesses like funeral homes. We will continue to advocate against the provision in this bill that will negatively impact funeral homes. For more information on this issue or to learn how you can get involved in advocating for health care reform, contact NFDA Director of Political Affairs Lesley Witter at 202-547-0877 or lwitter@nfda.org.  
 

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