IFA Urges Senate to Reject Reconciliation Health Care Package

For immediate release
Contact: Alisa Harrison, 202-628-8000
aharrison@franchise.org
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WASHINGTON, March 22, 2010—The International Franchise Association today expressed disappointment that the House has passed a deeply flawed health care reform bill and urged the Senate to reject the health care reconciliation package expected to be considered this week.

“We support health care reform, but this bill does not reduce the long term costs of health care and puts more regulatory burden on small businesses,” said IFA Vice President of Government Relations David French. “The House passed bill imposes a costly employer mandate, offers inadequate and unworkable tax credits to subsidize the mandated coverage and hides the true cost with an array of new taxes on small business owners. The reconciliation bill further increases taxes on small businesses and includes additional burdensome regulatory hurdles and costs. We urge the Senate to reject the reconciliation bill.”

French said the reconciliation package expands the employer mandate to include part-time workers, increases penalties, expands the hospital insurance tax to unearned income and increases fees on health insurers that will be passed on to small businesses.

“The reconciliation bill increases penalties for employers with 50 full time employees or more that do not offer health insurance coverage to $2,000 per full-time employee up from $750 per worker,” French said. “This increase alone demonstrates that Congress is putting the cost of health care reform squarely on the backs of businesses at a time when they are struggling to recover from the recession. This will severely impact the number of new jobs created.”

French added that the reconciliation bill includes the following provisions.

Part-time workers are now counted. Employers must aggregate hours worked by part-time employees monthly and then divide that number by 120 to determine the full-time equivalent.

The bill expands the Medicare Hospital Insurance Tax to unearned income. Starting in 2013, households with incomes above $200,000 ($250,000 for married couples) will have a new, 3.8 percent tax applied to their income from interest, dividends, capital gains and some profits from investments in partnerships and S corporations.

The bill delays and increases the fees on health insurance providers. Starting in 2014-2016, fees will increase from $6.7 billion annually to $11.2 billion. In 2017 and after, they increase from $6.7 billion to $12.2 billion. These fees will be passed on to consumers of insurance plans in the fully-insured market, in particular, small businesses.

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About the International Franchise Association
The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. Celebrating 50 years of excellence, education and advocacy, IFA protects, enhances and promotes franchising through government relations, public relations and educational programs. Through its awareness campaign highlighting the theme,
Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the 21 million jobs and $2.3 trillion of economic activity generated by franchising. IFA members include franchise companies in over 90 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.

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