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John H. Fitch Jr. With the congressional debate on health care reform beginning to move through the legislative process, the NFDA Advocacy staff thought it would be informative to give our members a quick summary of the small business provisions in each version of the bills now being considered by the House and Senate. It should be noted that the Senate leaders are seeking to merge the Senate Finance bill with the HELP Committee bill to come up with a single bill to be voted on by the whole Senate. NFDA continues to be actively engaged in this process to seek the best option for funeral service to acheive access to affordable health insurance for themselves and their employees with the minimum of financial and regulatory burden. We do not expect Congress to vote on a final bill until at least early December. Select Small Business Provisions in Congressional Healthcare Reform Legislation Senate Finance (Mark as modified) States would assist small employers that opt to use the SHOP exchange as the enrollment option for their employees. Small employers offering insurance through the exchange could not self-insure. Small employers that make age-adjusted contributions on behalf of their employees would be granted a safe harbor from non-discrimination rules. HHS will provide technical assistance to the exchange. "Mini-medical" plans, those with limited benefits and low annual caps, would be prohibited from being offered in the state exchanges. House Tri-Committee (H.R. 3200) Establishes a federal "Health Choices Administration," with a Health Choices Commissioner. Establishes a federal health insurance exchange. State-based health insurance exchanges could be offered by single states or groups of states as an alternative to the federal health insurance exchange. The Health Choices Commissioner would contract with entities offering qualified health benefit plans to offer plans through the federal exchange. All individuals not enrolled in another qualified health benefits plan or other acceptable coverage would be eligible to enroll in an Exchange-participating plan. Acceptable coverage also includes "grandfathered" health insurance coverage. Eligibility for enrollment through the exchange would be phased in, starting in 2013 with individuals and employers with fewer than 10 employees. In year 2 (2014) eligibility would be expanded to employers with fewer than 20 employees. In subsequent years, the Health Choices Commissioner may permit other employers to be eligible to enter the exchange. Senate HELP (S. 1679) "American Health Benefit Gateways" would be established in each state by the states or by HHS. Employers qualified to enroll in the exchange, and who elect to enroll in a plan through an exchange, would have to employ no more than 10 employees (or meet a size restriction set by a State). States have the option to either establish a Gateway or request that HHS establish a Gateway. If a State has taken neither action 4 years after enactment, HHS will establish a Gateway in the State. Policy: Employer Mandate Senate Finance (Mark as modified) The mark requires all employers with more than 50 employees that do not offer coverage to pay a flat fee for each employee who receives a tax credit for health insurance through a state exchange. The amount would be equal to the average tax credit in the state exchanges, capped at $400 per employee. This provision is effective January 1, 2013. House Tri-Committee (H.R. 3200) Require employers to offer coverage to employees and their families under a qualified benefits plan, contribute towards coverage, and make contributions to the Exchange for employees who obtain coverage through the Exchange. The bill requires employers, if they do not provide coverage, to pay an amount equal to 8% of average wages into a Health Insurance Trust Fund. For small employers, the percentage of average wages is reduced incrementally depending on the annual payroll of the employer: employers with an annual payroll up to $250,000 pay 0 percent; between $250,000 and $300,000 pay 2 percent; between $300,000 and $350,000 pay 4 percent; and between $350,000 and $400,000 pay 6 percent. Provides authority to the Health Choices Commission to set standards to prevent "improper steering" of high-risk individuals into the Exchange. Contains a "play or pay" requirement: Requires employers to make a payment to HHS for any employee not offered qualifying coverage or for whom the employer does not pay at least 60% of the monthly premiums. The payment would be $750 per full time employee, and $375 for part time employees, to be adjusted each fiscal year based on CPI. A small business exception is provided for employers that employ no more than 25 employees.
Senate Finance (Mark as modified) Provides "small business employee health coverage credits" as part of the general business tax credit equal to 50% of the qualified employee health coverage expenses to the employer (small employers defined to have 25 or fewer employees) for the taxable year. There are phase-outs based on average compensation of an employer's employees and on employer size. No credit is allowed for expenses paid for employees whose total compensation during the taxable year exceeds $80,000. There are special rules for partnerships and the self-employed. Provides for a "small business health options program credit" that would be calculated using an employer-size factor. Eligible small employers would have 50 or fewer employees and an average wage of under $50,000 for full time employees. Self-employed individuals could also qualify, subject to income restrictions. Employers may not receive a credit for more than three consecutive years. Policy: Other Employer Requirements Senate Finance (Mark as modified) Cafeteria Plan Changes âÂ?Âì³? A cafeteria plan is a separate written plan under which all participants are employees, and participants are permitted to choose among at least one permitted taxable benefit (for example, current cash compensation) and at least one qualified benefit. The Finance bill would ease cafeteria plan participation restrictions and include selfâÂ?Âì³?employed individuals as qualified employees. The proposal also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees. Miscellaneous Provisions in the Senate Finance Committee version of the reform bill: Repeal Business Deduction for Federal Subsidies for Certain Retiree Prescription Drug Plans - Repeals the rule that the exclusion for subsidy payments is not taken into account for purposes of determining whether a deduction is allowable with respect to retiree prescription drug expenses. This provision would be effective for taxable years beginning after December 31, 2010. Creates a timeline for accelerating the development, adoption and implementation of a set of operating rules for each HIPAA transaction for which there is an existing standard - The operating rules would be consensus-based, and reflect the business rules around which health plans and providers would uniformly use the HIPAA standards. Adds the electronic funds transfer (EFT) of health claims payments as a HIPAA transaction and provide for the adoption and enforcement of a standard for EFT. Small Business Wellness Programs - Provides $200 million to the Secretary of Health and Human Services for up to five years for grants to small businesses with less than 100 employees. The program encourages access to comprehensive, evidence-based workplace wellness programs. Health Insurance Consumer Assistance Grants - Small Business Development Centers (SBDCs) would be eligible to receive Health Insurance Consumer Assistance Grants. This program authorizes $30 million to establish a competitive grant program to support consumer assistance organizations in each state. Organizations who receive grants would assist consumers in solving problems and navigating health insurance coverage transitions, collect data on consumer encounters, and report problems and inquiries report to HHS.
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