July 23, 2009 (Washington DC) – On July 17, the House Education and Labor Committee voted unanimously to accept an amendment offered by Congressman Duncan Hunter (R-Alpine) aimed at protectingt small businesses from employer mandates included in comprehensive health care reform legislation currently under consideration in the House.
Hunter has stated that he opposes a public option for healthcare proposed by the Democratic majority in Congress. That measure would require most businesses to provide employees with health care coverage or risk incurring a penalty tax equal to eight percent of annual payroll expenses. The Hunter amendment allows businesses to apply for an exemption from this mandate if the Department of Labor determines that compliance would result in job losses that negatively impact that company or the community it serves.
Hunter told the committee that the National Federation of Independent Businesses estimates that as many as 1.6 million jobs - more than 1 million of them small businesses -- will be lost. “There is also the unfortunate reality that some businesses might instead choose to reduce wages, limit inventory or, even worse, close their doors altogether.”
In 2008, about half of small businesses nationwide with three to nine workers offered health coverage according to another study. “Faced with mandates and penalties, businesses are going to have to make tough decisions at one of the worst possible times,” Hunter concluded. “ Right now, these businesses don't know how they will have to respond - and that's a serious problem. But one thing is certain: job loss must be avoided if we hope to maintain the profitability of America's small business community.
Today's recession has severely challenged small businesses. Imposing mandates and penalties without opportunity for relief will only make matters worse.”
The New York Times reported this week that businesses with one to nineteen employees lost 757,000 jobs from the second quarter of 2007 through 2008, Hunter noted. That amounts to 53 percent of all private sector losses for a group of companies with about 20 percent of all employees.
"Do we really want to make things more difficult for these businesses and those who rely on the jobs they provide?” he asked. “I hope we all agree that the answer is no…This amendment recognizes the difficult challenges that employers are currently facing - or, may face in the future - and provides a reasonable opportunity to apply for a temporary exemption. In other words, it provides employers with an economic `safety valve.’"