AUGUSTA — If you are a small business owner, the new health care reform law will affect you. Whether that’s good or bad depends on who you ask and how many employees you have.
“This year, small businesses that choose to offer coverage will begin to receive tax credits of up to 35 percent of premiums to help make employee coverage more affordable,” Nancy-Ann DeParle, director of the White House Office of Health Reform, said Tuesday in a prepared statement.
Beginning in 2014, small business employees will have access to a health insurance exchange in which they will have the group purchasing power of a big business or union to get lower prices and better quality coverage, according to Rep. Mike Michaud’s office. Michaud is a Democrat representing Maine’s 2nd District.
Rep. Chellie Pingree, a Democrat representing Maine’s 1st District, said in a release that the new health care law “creates the largest health care tax break in history to make it easier for small businesses and individuals to afford coverage.”
For businesses with fewer than 50 employees, it’s all true. According to Michaud’s office, that would be 97 percent of all businesses in Maine.
But Maine’s U.S. Sens. Olympia Snowe and Susan Collins, both Republicans, took to the Senate floor on Wednesday to criticize how the new law treats businesses with 50 or more employees.
“Under this bill, firms with more than 50 workers would have to pay $2,000 per employee with just the first 30 employees exempted,” Snowe said during debate on a measure aimed at making changes to the new law.
“And if that’s not enough, part-time workers – and that includes seasonal workers — are now counted in determining if the mandate would apply,” she said. “That means countless more middle-sized firms like restaurants and retailers would be subject to the mandate, which produces $52 billion in revenue.”
The fines would apply to businesses with 50 or more workers that do not offer health insurance and would take effect in 2014. The employer mandate was included in the measure to help expand coverage, which proponents said was necessary to hold down health insurance premiums for all.
“Having these fines on the books will discourage job growth, no matter when they become effective, because small businesses won’t hire and train workers today, just to let them go tomorrow,” Collins said on the floor.
David Clough, Maine’s state director for the National Federation of Independent Business, said the potential for fines would definitely play into the decision-making of small business owners near that 50-employee threshold.
“The increased costs to small business owners will be job-killers,” he said. “Small business owners would like to offer health insurance, but for the cost.”
Clough said the tax incentives offered to businesses phase out over time and depend on how many employees there are. According to the law, only businesses with 10 or fewer employees would be eligible for the full 35 percent rebate.
On the whole, Clough said, the law has some parts that will help small businesses and others that will harm them.
“If it doesn’t work for small businesses, it’s not going to work for Maine,” he said.