Address Leaves Small Business Owners With More Questions
Washington, D.C., September 10, 2009
– President Barack Obama delivered a prescription for health care last night that left some of the self-employed wondering just where they fit in the plan. While the speech elaborated on current proposals the President wants in a final reform package, he did not address a number of key concerns for micro-business owners (those with 10 or fewer employees). Click here to read the full text version of the President’s speech online.
“While I am pleased that the President has decided to take a more active role on health reform and referee the players on Capitol Hill, ultimately we all know that the devil is in the details,” remarked Kristie Arslan, executive director of the National Association for the Self-Employed (NASE). “If the President is going to hold fast to the current proposals -- some good, some bad -- on the table and not offer any new ideas, then we need to know his opinion on the details and how it differs from that of Congress.”
The NASE supports a few specific reform proposals that will provide enormous relief for self-employed business owners. These propositions will greatly increase their ability to afford coverage for themselves, their families and their employees:
- Exchange/Gateway: The creation of a national Exchange as well as other pooling mechanisms, such as cooperatives, to increase access to coverage and create administrative efficiencies for individuals and businesses with 50 or fewer employees.
- Business Deduction for Health Insurance for the Self-Employed: Unlike their larger counterparts, the self-employed cannot deduct health insurance premiums as a business expense and instead are taxed on their health coverage. The cost of leveling the playing field is about 2.5 percent of the total price tag for health reform. For our smallest businesses, this is a small price to pay for a provision that will make coverage more affordable and accessible for 22 million self-employed Americans nationwide.
- Expansion of Health Reimbursement Arrangements (HRAs): Sole-proprietors are not eligible to participate in an HRA, which is a flexible benefit option that allows other business entities to help employees with their health care costs. HRAs represent a consistent and stable way for the self-employed and micro-businesses to extend employees financial assistance toward health care costs.
- Market Reforms: The NASE supports market reforms that would remove the use of health status as an underwriting mechanism for access to coverage.
- Benefits: Current health reform legislation creates a committee or advisory council to determine an essential benefits package (i.e. a minimum level of coverage allowed.) The determination of an essential benefits package can play a large role in the cost of coverage. There must be a balance between cost and coverage to ensure that any required minimum benefits package is affordable.
After Pres. Obama’s speech, the self-employed weighed in with their reactions:
“My concerns remain the same: Is there a possibility that my premiums may actually increase because I can no longer purchase the kind of coverage I currently have,” Graphic Designer Alyssa Turk of Grand Rapids wondered. “Regardless of how you cut it, the government will be much more involved in the health care choices of those who purchase health care privately. This is what I am opposed to. I am happy to be responsible and have health insurance; I simply don't trust the government to determine my plan.”
“As small-business owners, I see most of us just taking the 8% penalty for not insuring our employees and letting our employees just use the government option,” said Chris Humphrey, a photographer from Tulsa, Oklahoma. “It's sad but true. I can't afford a massive hike in health care rates and I know most other small businesses can't either. Let the free market work and let the insurance companies compete across state lines.”
View a more detailed version of the NASE’s Health Reform Priorities online.
Read Arslan’s entire commentary on the NASE Staff Blog.
Read the full text of President Obama’s address to a joint session of Congress.
About the NASE
The National Association for the Self-Employed (NASE) is the nation's
leading resource for the self-employed and micro-businesses, bringing a
broad range of benefits to help entrepreneurs succeed and to drive the
continued growth of this vital segment of the American economy. The
NASE is a 501(c) (6) nonprofit organization and provides big-business
advantages to hundreds of thousands of micro-businesses across the
United States. For more information, visit the association's Web site