TUESDAY, November 3, 2009 – U.S. Rep. Mike Rogers, MI-08, says House Democrat leaders have proposed dozens of new regulations and tax increases in their new 1,990-page health care bill, H.R. 3962, which will make it even harder for small businesses to afford health insurance for their employees.

“This bill will kill jobs,” Rogers said. “A model developed by President Obama’s chief economic advisor Christina Romer indicates that as many as 5.5 million jobs could be lost due to the bill's new taxes. Nothing could be worse at a time when national unemployment is at a 26-year high.”

Rogers said the new Democrat health bill:

- Creates a new mandate requiring small businesses to offer health insurance – even if they can’t afford it. This applies to all businesses above $500K in payroll; and it applies to full time and part time workers, especially tough on Michigan seasonal employers.

- Sets up a new $460 billion income tax increase which will hit 28,000 Michigan small businesses. The new income surtax will apply to all single filers above $500K, which includes thousands of small businesses; will impact the employers of 65 percent of Michigan’s small business employees; and is not indexed to inflation, which will create an AMT-like fiasco for small business owners in the future.

- Establishes perverse incentives for small businesses to drop health insurance. If they don’t offer health insurance, they would be forced to pay an 8 percent payroll tax. With average costs for health insurance at 10 to 15 percent of payroll per employee, this is a huge incentive for businesses large and small to drop employees from health coverage and force them into a government-run program. This “pay-or-play” mandate is a direct tax on jobs, which will increase Michigan’s 15.3 percent unemployment rate, and lead to $135 billion in tax penalties on businesses that can’t afford to offer insurance. Worse, the non-partisan Congressional Budget Office has confirmed that this tax "could reduce the hiring of low-wage workers." 

 - Creates another perverse incentive to keep workers’ pay low. In order for small businesses to receive subsidies to cover a portion of their health care costs, the average employee income must be below $20,000; and the company must have fewer than 10 employees. That means 21 percent of small businesses in Michigan be forced to keep employee pay below $20K or lose assistance from the government.

Other examples of regulations in H.R. 3962 which will punish Michigan small businesses:

· After 5 years, all employer-sponsored insurance would have to meet strict new federal mandates in order to be considered “government-approved”

· Health Savings Accounts (HSAs) will be outlawed, gutting the fastest growing insurance product and an affordable small business option for quality coverage that currently covers 300,000 Michigan individuals and families.

· New record-keeping requirements will force small businesses to keep records of contractors and service providers. The federal government would then have the power to force employers to offer those non-employees health insurance, or face a tax penalty.

· Imposes fines of $100 per employee per day on employers who do not offer a level of health coverage that is “government-approved” (employers would pay this fine every day until the oversight is corrected). This means that fines of up to $500,000 can be imposed on employers who make an honest mistake, thinking they had provided what the government deemed “sufficient” coverage.

· New federal Health Choices Commissioner will be allowed to conduct audits and inspect small businesses to make sure they comply with new federal insurance mandates.

“With Michigan leading the nation in unemployment, our state will suffer more than most states from the impact of these new taxes and regulations,” Rogers said. “Small business is the backbone of the national economy, creating more jobs and employing more Americans than any other sector of the economy.

“In Michigan, we lost 137,000 jobs between February and October. Loading up small businesses with additional taxes and regulation is exactly the wrong way to improve our economy, restore our jobs, and put Michigan on the right track.”

EDITOR’S NOTE: Rep. Mike Rogers has introduced a health reform plan, H.R. 3713, that would:

· Allow small businesses to pool together to purchase affordable insurance

· Allow small businesses to purchase insurance across state lines to get lower costs

· Expand HSAs and make them more affordable for employers/employees

· Give small businesses more flexibility in how they offer insurance

· Enact comprehensive medical liability reform to lower costs

· Allow employers to offer discounts for healthy behavior through wellness/prevention programs.