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Michigan Businesses Urged to Study Costs and Affects of U.S. Healthcare Reform Packages
Date:9/10/2009

WARREN, Mich., Sept. 10 /PRNewswire-USNewswire/ -- Owners of small- to mid-sized businesses across Michigan need to stay informed and to speak out against potential higher taxes and other costs associated with national health care reform, according to the Michigan Business and Professional Association (MBPA) and the Michigan Food and Beverage Association (MFBA) in response to President Obama's speech on healthcare reform.

The U.S. House and Senate bills, as currently drafted, are written as "play or pay" models, which could negatively affect both businesses and individuals, said Ed Deeb, president of both associations.

Deeb said, "Given current economic conditions, MBPA and MFBA oppose any health care changes that result in an increase in costs to run a business, or a firm's ability to compete in the marketplace. We are concerned that there are too many considerations and possibilities on how a business will react to this additional tax burden depending on the size of the company. We are also concerned about the ripple affect of small business taking most of the cost burden of providing health care in this country. The overall impact on the economy and possible loss of industry jobs is of great concern. This is a complex issue, and it needs further diligence by our government."

Deeb continued: "We are aware of the tremendous strain that the rising costs in health care insurance premiums and the onerous Michigan Business Tax (MBT) have put on many companies' ability to do business. It is our priority to ensure that our state and federal legislators know exactly how business owners feel about footing the bill for our nation's health care system."

Deeb added that the boards of directors of both associations, together with a membership legislative task force, have been meeting regularly to review the impact of health care reform on businesses "for the greater good of our communities."

Provisions of U.S. House of Representatives proposed bill include:

  • Creates a government run insurance plan called a "public option," which would allow the government to negotiate payment rates with health providers;
  • Creates a health insurance "exchange;" a new regulated marketplace for low-income individuals to purchase insurance. It would allow individuals and small employers to comparison shop among private and public insurance plans. It would also prohibit insurance companies from refusing coverage for a pre-existing condition;
  • Requires all individuals to obtain health insurance or pay a penalty of up to 2.5 percent of their modified adjusted gross income;
  • If employer insurance costs an employee greater than 12 percent of their income they would be eligible to enter into the exchange and apply for affordability credits;
  • Individuals would be permitted to keep their current coverage as a "grandfathered plan" and the bill would allow a 5-year grace period for current group health plans to meet the new guidelines established in the bill;
  • Establish a small business tax credit for firms that want to provide healthcare coverage to their employees.

While the Bill exempts small businesses with an annual payroll of less than $500,000 from paying a payroll tax, companies with larger payrolls would pay a tax anywhere from 2 percent to 8 percent, depending on their payroll amount.

The proposed U. S. Senate Bill requires all employees to receive health care in a "pay or play model." In addition, the Senate Bill calls for:

  • Companies with less than 25 employees are exempt from the pay or play model;
  • Employers with 50 or fewer full-time workers that pay 60 percent or more of an employee's premiums will get tax credits for three years to off-set new costs;
  • Small businesses and the self-employed will be able to buy into statewide buying pools to reduce premiums.

Deeb urged Michigan business owners to contact their U.S. senators and representatives to air their concerns about national health care reforms and the potential increased costs of doing business in Michigan.

A summary of the latest House and Senate proposals for national health care reform may be found on the MBPA Web site: http://michbusiness.org/AdvocacyLegislation.aspx

Based in Warren, Mich., the MBPA is the largest business organization of small to medium-sized businesses in Michigan, representing more than 20,000 members who employ over 180,0000 persons. Members include attorneys, physicians, architects, accountants, construction companies, banks, retailers, wholesalers, manufacturers and the like. Member businesses receive numerous benefits including free legal and financial consultations; discounted technology, automotive and office products; employee training and recruitment assistance; and competitive insurance rates. The MBPA is a sister association to the Michigan Food & Beverage Association (MFBA) with more than 3400 members.

    Contact:  Sue Voyles (734) 667-2005
    -or-           Ed Deeb (586) 393-8800



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SOURCE Michigan Business and Professional Association
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