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Washington Watch - November 11, 2009

Wednesday, November 11, 2009

Health Reform: More Of The Same From House Lawmakers

The House narrowly passed the Affordable Health Care for America Act (H.R. 3962) this weekend and now the Senate will be the new ground zero for health reform debate. The National Association for the Self-Employed (NASE) was dismayed to see that lawmakers have once again failed to include provisions that will make a noticeable difference in the bottom line of the nation’s millions of self-employed business owners.

According to NASE’s June 2008 study, “Health Coverage: A Micro-Business Perspective,” one-third of self-employed individuals are currently uninsured, with cost being the primary reason for their lack of insurance. Furthermore, the study showed a massive drop in employer-sponsored coverage amongst micro-businesses, those businesses with fewer than ten employees. In 2008 only 18.6 percent offered health insurance to their employees, down from 46.2 percent in 2005. The primary reason for dropping group health coverage was again, cost.

“In this difficult economic time, reform should make accessing health coverage easier and more affordable for small business,” said Kristie Arslan, executive director of the NASE’s legislative offices. “It seems the legislation passed by the House will likely make it more difficult, and worse, more costly for our nation's entrepreneurs to obtain health coverage.”

Arslan notes that, while the bill’s small business and individual tax credit provisions sound good on paper, in reality they will not take effect for at least three more years, in 2013. Additionally, the credit can only be applied towards health coverage purchased through the new Exchange or health marketplace the bill creates, forcing many self-employed business owners to choose between keeping the coverage they currently have or dropping that coverage to obtain financial assistance with skyrocketing health costs.

Read Arslan’s entire commentary, titled “House Democrats Eke Out A Victory On Health Reform,” on the NASE Staff Blog. For more information on the NASE’s recommendations, please visit NASE in Action.


Legislative Alert: Bill to Increase Meals & Entertainment Deduction

A new bill would increase the amount that companies with 50 or fewer employees may deduct for business-related meals and entertainment expenses. The Helping Small Businesses Grow and Prosper Act of 2009 (H.R. 3952) would allow these companies to deduct up to 80 percent of these expenses, up from the current 50 percent. To qualify, these expenses must be directly related to or associated with activity for the business. The NASE supports this important legislation.

For more details, visit the Library of Congress (THOMAS) online.


House Passes Bill To Bring Immediate Enforcement Of Credit Protections

The House recently passed a bill that would enforce credit card rules immediately instead of beginning enforcement early next year. The bill (H.R. 3639), sponsored by Representative Carolyn B. Maloney (D-N.Y.), was passed with bipartisan support 331-92.

Earlier this year, Congress enacted legislation (PL 111-24) containing new, more stringent regulations on financial institutions. The law prohibits double-cycle billing and interest rate increases in the first year an account is activated, and also requires notice 45 days before any interest rate increase, among other changes. Banks and credit card companies have until February 2010 to implement the required changes.

Concerned that some financial institutions are taking advantage of consumers before the enforcement date of the legislation, the bill makes good on the promise of Financial Services Chairman Barney Frank (D-Mass.) to implement the law sooner if credit card issuers continued to increase interest rates.

While Rep. Frank said that the bill aims to address a “pattern of abuse” practiced by many credit card companies, the ranking member of the Financial Services Committee Spencer Bachus (R-Ala.) encouraged colleagues to oppose the bill, stating that it would hurt small businesses that rely on credit to fund their operations while protecting consumers who had failed to pay their credit card bills.

The House also adopted an amendment meant to discourage credit card companies from raising interest rates, proposed by Representative Carolyn McCarthy (D-N.Y.), before passing the bill. The amendment was adopted 427-0.


Small Biz Health Care Roundup

Here's a sampling of this week's top health care reform articles. If you find an article or blog that you think should be considered, drop us a line at media@nase.org.

  • House Democrats Eke Out A Victory On Health Reform [Commentary] (NASE Staff Blog) - "The House bill is important because it sets the stage for what might be in a final reform bill. Unfortunately, the legislation doesn't do much to help the self-employed and micro-business get immediate relief from high health costs. The only quantifiable item providing bottom line cost relief to small businesses in H.R. 3962 is a tax credit. Unfortunately, this credit does not begin until 2013, leaving the self-employed to sweat it out for another three years."
  • Entrepreneurs In Congress Say No To Health Care Reform (NY Times - You're The Boss Blog) -"[Whether] Republican or Democrat, they overwhelmingly voted against the health care reform bill that passed late Saturday."
  • Health Care Reform: You'll Learn To Love It (Politics Daily) - "I know you conservatives are upset about the health care reform bill clearing the House, but let me spin it another way for you."

 


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