Health Care Reform Summary

The U.S. Congress and Obama administration have made passing comprehensive healthcare reform their top priority. All versions of the bill that have been presented by the Senate and House to this point would require employers to pay for healthcare in some form or fashion. One Senate version has employers paying at least 60% of premiums or a $750 fine per year PER EMPLOYEE. A House version requires a minimum contribution of 72.5% or a fine of 8% of average wages!

Now is the time to contact your Members of Congress and let them know that these proposals may very well bankrupt you business!

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House of Representatives

The House Energy and Commerce Committee recently came to an agreement that will allow the stalled health care bill to be voted out of committee. Specifically, under the new agreement, businesses with $500,000 (previously $250,000) or less in total payroll will be exempt from the employer mandate. Businesses with payrolls between $500,000 and $750,000 will be subject to a sliding scale tax, while those above $750,000 will have to pay 8 percent of total payroll if they do not provide health insurance.

In the larger version of the bill, an employer must provide individual and family coverage while non-offering employers must pay an 8% payroll tax. Specifically, employers must contribute 72.5% of premiums for individuals and 65% of premiums for family coverage. A proportional amount must be given to part-time employees. For employees who decline employer coverage, employers must contribute directly to the public health insurance exchange. Employers who do not pay for health care must pay a fine of 8% of their average wages.

Also included in the bill is an exemption for small business owners. Small employers are defined as those whose annual whose annual payroll for the calendar year does not exceed $400,000. Those whose payrolls are greater than $250,000 have graduated penalties ranging from 2-4%.

 Now all three versions of the bill must be reconciled before heading to the House floor.


The Senate HELP Committee’s version of the healthcare bill stipulates that employers with 50 or fewer full-time workers who pay 60% or more of their employees’ health insurance premiums get tax credits for subsidizing coverage. Additionally, employers with more than 25 employees who don’t offer qualifying coverage OR who pay less than 60% of their employees’ monthly premiums are subject to a $750 annual fee per uninsured full-time employee and $375 per uninsured part-time employee.

 The HELP bill also includes the LEAN Act/MEAL Act menu labeling compromise.

Meanwhile, the Senate Finance Committee continues to work behind closed doors. Committee members confirm, however, that a broad employer mandate and public option would not make the final bill.

The Finance Committee’s proposal is set to include a  “free rider” provision where businesses with 50 or more employees must contribute to the cost of tax credits for eligible workers in the in the public program. Employers also would have to contribute 50 percent of the national average Medicaid costs for workers enrolled in the low-income federal healthcare program.

Health Care Talking Points

  • As a small business owner, I provide jobs to those in the community. Employer mandates may well put my stores out of business and my employees out of work.
  • An employer “pay or play” requirement does nothing to address the cost hurdles facing small employers like me. Instead of an employer requirement, Congress should enact reforms that expand the number of affordable choices available to employers and their employees.
  • Employer mandates and one-size-fits-all coverage does not provide the flexibility that employers need to design benefits to workforce needs and thus provides a disincentive for responsible spending and health insurance cost containment.
  • The existing market needs more choices – not less. The potential inability of existing insurers to compete with a tax-payer funded government health plan threatens the stability of the private market.  

Last Talking Point: Calculate the Cost to YOUR Business!

It is crucial that you share statistics on how these proposals will impact your businesses. Giving your members hard numbers will help them understand the effect that this bill will have on their constituents.

For your Senators: According to the Senate HELP Committee’s proposal, this bill will cost me:

($750 x number of full-time employees PLUS $375 x number of part-time employees) for non-compliance  OR
(60% x monthly premium costs x 12 x number of employees) for compliance 

For your Representatives: According to the House proposal, this bill will cost me:

(Annual payroll x 8% x number of employees) for noncompliance OR
72.5% of monthly premiums x 12 x # of individual employees PLUS 65% of monthly premiums x 12 x number of employees on family plans)

This will increase my operating costs by ()% and/or this cost may well put me out of business, leaving my ____employees unemployed.

*CFA has been asked to provide monetary figures on the specific impact of this legislation on your business. Please send us specific figures on:

-Cost of an 8% payroll tax

-Cost to pay 60% of premiums for full-time workers

-Cost of paying $750 penalty for each full-time worker and $375 per part-time worker

-Cost of paying 72.5% of premiums for individuals and 65% of premiums for family coverage for your current employees

-Total impact on profits