Small business groups debate both sides of healthcare law

Two organizations representing small-business owners are on opposite sides of the argument about the efficacy of the 2-year-old healthcare reform law.

Among the petitioners arguing before the U.S. Supreme Court Monday is the National Federation of Independent Business, which has said the Patient Protection and Affordable Care Act places a heavy financial burden on small business.

Making a near 180-degree argument is Small Business Majority, which cautioned that a repeal of the Affordable Care Act would lead to more small businesses dumping healthcare coverage because it was priced out of their reach.

Among other things, petitioners before the Supreme Court are challenging the act's requirement that everyone who can afford insurance have insurance or pay a fine. However, another argument the justices will hear is whether the entire act must be struck if the jurists find one part unconstitutional.

John Arensmeyer, founder and chief executive officer of Small Business Majority, said the organization's research indicates 67 percent of small businesses believe reform is "urgently needed" and higher percentages said they either couldn't afford to provide coverage to their employees or were struggling to do so.

The Affordable Care Act "takes aim at costs and has made a difference," he said during a conference call last week.

Tax breaks specifically for small businesses plus other reforms in the law mean "small businesses are seeing relief and are seeing light at end of the tunnel," Arensmeyer said.

What's more, he said, the federal money "is free money on the table," he said, noting that about 300,000 small-business professionals received about $435 billion in tax credits, and that number is expected to grow.

Looking ahead, he noted that beginning in 2014 small businesses can have the option of pooling resources to negotiate better rates through health insurance market exchanges. Right now small businesses are paying an average of 18 percent more for insurance because they lack negotiating clout, he said.

"There's a lot of work to be done," Arensmeyer said. "But what's important is it's an improvement over the status quo [which is] completely unsustainable."

Repeal of the law would be "disastrous" for small businesses, he said, because it would "mire them in a broken system, stunt growth and bleed them dry."

On its Web site, NFIB Chief Executive Officer Dan Danner called the mandate and health insurance tax "job-killers" that could "drastically change the private sector job market as we know it."

He said the organization's research foundation projected private-sector job loss could exceed of 249,000 jobs with small business absorbing a 59 percent hit.

"The unknowns associated with the employer mandate have left many small-business owners trying to forecast how they will shift their workforce to avoid the financial penalties that will stem from offering 'affordable' coverage, as defined by Congress, to their employees," he said.

The organization's petition focuses on severability, saying healthcare reform's convoluted history makes it apparent that "without the individual mandate at its heart, no statute remotely resembling the act would or could have been enacted."

"The ACA was the fragile product of extensive legislative deal-making; to strip out its centerpiece would fundamentally alter the original legislative bargain," the NFIB brief said. "Invalidation of the mandate therefore requires that the entire act be stricken."

Danner said the organization was confident the Supreme Court would overturn the law.

Mike Roach of Portland, Ore., a small-business owner and a NFIB member, said he doesn't agree with the organization's assessment.

"Tearing down the law won't help us; it would hurt," Roach said during the Small Business Majority conference call. "The Affordable Care Act … is the first significant break small businesses have ever gotten" on insurance costs.

He said his business was eligible for a tax credit of several thousand dollars to help provide insurance for six of his nine employees. The complexity may be daunting, but "it's not rocket science," Roach said.

"That's a huge help to us," Roach said.

Despite comments for and against the act, Roach said the one thing he's never heard any argument about is "the tremendous burden health insurance has been and continues to be for small businesses. The costs are crushing us."

Repealing the Affordable Care Act "would send us back to the Dark Ages of health insurance," Roach said.

Doug McSwain, a Lexington, Ky., attorney who focuses constitutional, employment and healthcare law, said the Small Business Majority filed a friend-of-the-court brief against the repeal of the Affordable Care Act.

McSwain said the brief argues the Affordable Care Act was within the parameters of the Commerce Clause because the minimum health coverage requirement "targets the cost-shifting forces that the uninsured create … that substantially impact interstate commerce."

On the severability question, he said the Supreme Court has ruled that one part of a law being declared unconstitutional doesn't void the entire act.

"We think the precedent's pretty clear," McSwain said.

He noted the Affordable Care Act has 10 separate titles dealing with other healthcare-related issues and "all of it does not need to fall" if the mandate is declared unconstitutional.

Roach said many small-business owners have benefited from the law in multiple ways.

"We hope the Supreme Court justices are aware of that fact as they deliberate on this historic piece of legislation," he said.