Entrepreneurs

Small-business groups glad to see mandates go in GOP health care plan

House Republicans released a plan Monday evening to replace the Affordable Care Act, which eliminates a key provision in that law: The employer mandate.

The mandate requires businesses with at least 50 or more full-time employees to offer workers insurance or face penalties for failing to comply. The GOP plan, called the American Health Care Act, eliminates a similar rule for individuals that requires them to seek coverage or face fines.

The employer mandate has been cited as an impediment to small business growth in particular by opponents of the law, who claim it may force companies near the 50-employee threshold to make decisions about hiring based on the requirement that they offer workers coverage.

More broadly, the cost of health-care is a major concern for small businesses, with research from the conservative National Federation of Independent Business ranking the cost of health insurance its number one issue since 1986, and the nonpartisan National Small Business Association ranking it number three in a recent report.

Speaker of the House Paul Ryan (R-WI) signs legislation to repeal the Affordable Care Act, also known as Obamacare, and to cut off federal funding of Planned Parenthood during an enrollment ceremony in the Rayburn Room at the U.S. Capitol January 7, 2016 in Washington, DC.
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Speaker of the House Paul Ryan (R-WI) signs legislation to repeal the Affordable Care Act, also known as Obamacare, and to cut off federal funding of Planned Parenthood during an enrollment ceremony in the Rayburn Room at the U.S. Capitol January 7, 2016 in Washington, DC.

"We think economics and affordability will drive people to get coverage, not necessarily penalties," says Karen Kerrigan, president and CEO of the nonpartisan Small Business & Entrepreneurship Council, an advocacy group. "Repealing the mandates, including the employer mandate, and taxes in the ACA are measures we have supported for some time."

The GOP plan also eliminates subsidies to help lower-income Americans purchase insurance and replaces them with tax credits based on age: Credits will grow as a person does.

In addition, the act freezes Medicaid expansion in 2020, strips funding for Planned Parenthood for a year and expands the incentives to use health-savings accounts.

Protesters hold signs protesting Planned Parenthood in front of the Longworth House Office Building on Capitol Hill September 16, 2015 in Washington, DC.
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Protesters hold signs protesting Planned Parenthood in front of the Longworth House Office Building on Capitol Hill September 16, 2015 in Washington, DC.

Two popular ACA provisions allowing younger people to stay on their parents' health plans until age 26, and ensuring those with pre-existing conditions will not be denied coverage, are also included in the draft.

The cost of the plan is not yet known, pending a score from the nonpartisan Congressional Budget Office.

Outside of the employer mandate, advocates for the self-employed and micro-businesses, including the National Association for the Self-Employed (NASE), are pleased to see the individual mandate scrapped.

"The effort is a good first step, and America's smallest business community applaud efforts to eliminate the unfair individual mandate, while preserving safeguards from the prohibition on the bank on pre-existing conditions to ensuring coverage to age 26 and lifetime coverage caps," said Katie Vlietstra, vice president of public affairs at NASE. "The plan should also offer incentives, like tax credits, to encourage individuals to enroll in health-care coverage, instead of penalizing them."