Health Care and Insurance and Environment and Small Business

Health care fix may wait for '08: But other federal bills important to small business are making headway

September 24, 2007

That's not what many NFIB members wanted to hear. "I've been a member of [the advocacy group] since 1985, and since 1985 the top issue has been health care that is affordable for businesses and employees," said Barbara Quandt of Indianapolis-based Quality Environmental Professionals Inc.

The firm's health insurance costs increased by 33 percent in 2007, and Quandt said company leaders are "quaking" with dread over what will happen in 2008. QEPI covers 75 percent of insurance costs for its 35 employees.

Though the cost of health care puts pressure on everyone, Eckerly said there's no consensus on what to do about it-even among small-business owners.

A recent survey of 10,000 NFIB members found that, though most said they wanted affordable health care, there was no consensus on how to get there. NFIB will now dig into those findings, do follow-up surveys and conduct focus groups to see what its members want. Once it has a unified message to take, Eckerly said, "small business will have a seat at the table" for policy formation.

Eckerly said nothing will happen with the federal legislation until after the November 2008 presidential election, but health care likely will be at the forefront of the campaign.

Immigration reform

Immigration-reform efforts also have stalled, which could further slow progress addressing health care and other pressing concerns.

"I don't think you can solve the health care crisis and many other issues without dealing with illegal immigration," said Steve Goldberg, owner of Carmel-based SBG Design Inc. Without insurance, undocumented workers often are forced to use high-cost emergency rooms for health care, complicating the problem.

While immigration reform once looked like it might make headway this year, clashing bills all failed. In response, the Bush administration beefed up enforcement through new federal rules, including one that would have given teeth to socalled "no-match" letters intended to identify illegal immigrants.

If an employer sends in Social Security information on a new employee that doesn't correspond with a federal database, it gets a "no-match" letter from the Social Security Administration. In the past, employers mostly ignored these letters, which were often the result of database errors.

Under the new rules, companies with more than 10 employees will have a 90-day window during which they must resolve the discrepancy. After 90 days, they must fire the employee or face penalties up to $10,000 per violation.

"Congress was unable to pass an immigration overhaul and control the border so [the administration] looked to business to enforce immigration rules," Eckerly said.

Labor and immigrant-rights groups took the administration to court in late August and won an injunction that bars the rule from taking effect until the court case is resolved. NFIB is considering joining the suit against the new rules. In the meantime, it and other groups are trying to pressure the administration to understand the negative impact the rules could have on employers.

"The concern is just that the rule doesn't give employers enough time to respond," Eckerly said.

Movement elsewhere

While immigration and health care bills aren't moving, other bills are.

Congress must still get spending bills passed for the rest of this year, and its latest budget spends about $2 billlion more than the budget President Bush proposed. Eckerly wouldn't be surprised to hear veto threats.

Tied up in the spending bills is a oneyear patch to raise the level at which the alternative minimum tax kicks in. The AMT was passed back in 1969 to set a flat tax for the wealthiest households. It originally affected only 155 tax filers but wasn't indexed for inflation, so as incomes increase, more and more Americans are caught by the 26- to 28-percent tax rate.

That means more and more successful small-business owners are being forced to pay the higher AMT.

To counter that, Congress has regularly passed short-term patches to raise the AMT cutoff and perennially debated how to either adjust for inflation or eliminate the tax. Eckerly said it's almost certain that another patch will be passed this year, keeping the AMT from hitting a full 23 million taxpayers, but a permanent fix won't be likely because there's no agreement on how to pay for it.

Another bill that passed the U.S. House of Representatives and is pending in the Senate would legislatively reverse a U.S. Supreme Court decision on how to interpret a federal fair-wages law.

In the court case, the nation's top court found that an employee must file a case about discriminatory pay within 180 days of the decision about pay rates. That reversed some lower court findings that said each paycheck triggered a 180-day window.

Some in Congress felt that wasn't the intent of the original law, because victims of discrimination may not realize it until long after the original pay-rate decision. The House passed a bill dictating that every paycheck restarts the 180-day window to file a lawsuit.

NFIB's Eckerly said the danger for businesses is that liability will continue.

"It's a significant risk to an employer for a lawsuit that could wipe out their business," she said. "The back pay alone could mean their whole profit for the year."

While Eckerly tackles lobbying on the federal issue, state NFIB representatives are concentrating on early debate over changing Indiana's property-tax system.

NFIB membership is open to any private company, though most members are small firms. That sometimes makes lobbying a tough job because the 350,000 members are so diverse that business owners often have very different takes on legislative proposals.

But when members give lobbyists a clear message for lawmakers, it's one they listen to.

"NFIB is certainly one of the oldest and most respected business advocacy groups in the country," said Andy Fisher, spokesman for U.S. Sen. Richard Lugar.

NFIB's efforts to get feedback from its membership help its credibility.

"They really talk to their membership on the grass-roots level and meet face to face in each community," Fisher said. "In Washington, people appreciate that."
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