Women, Small Business Associations Call for Affordable Health Care

Published August 1, 2005

Ten women’s and small business associations surveyed by the National Women’s Business Council (NWBC) cite affordable health care as a leading legislative concern.

The NWBC’s May 2005 Issue in Brief indicated affordable health care for employees is at or near the top of the 10 surveyed organizations’ lists of legislative priorities.

Mandates Burdensome

Merrill Matthews, director of the Council for Affordable Health Insurance, says the study’s findings should be no surprise.

“There are about 9 million women-owned businesses employing about 27.5 million people–an average of three workers per business,” Matthews noted. “Many want to provide their employees with health insurance, but the Health Insurance Portability and Accountability Act (HIPAA) imposed by Congress and countless mandates and regulations imposed by the states have made health insurance unaffordable for many of these small businesses.”

HIPAA requires insurers to guarantee health insurance to small businesses, which drives up the price.

“Like all employers, women business owners are looking for affordable health coverage, but the demographics mean they have to look harder and pay more,” Matthews said. U.S. Rep. Mike Pence (R-IN) has introduced legislation to eliminate the HIPAA guaranteed issue provision for small businesses, Matthews noted.

Groups Like AHPs, HSAs

The majority of groups surveyed wanted to be able to offer employees participation in national insurance risk pools such as association health plans (AHPs). One group, the National Small Business Association (NSBA), expressed concern that AHPs conflict with existing state regulations.

The availability of additional options for individuals purchasing health care policies was a top request. The chance to purchase health savings accounts (HSAs) was a priority.

Respondents expressed a desire for tax credits to small business employers who pay a portion of the cost of employee health insurance premiums or employee HSA contributions. According to the National Association for the Self-Employed (NASE), sole proprietors, partners in partnerships, and S corporations do not receive a business deduction for insurance premiums.

Tax Breaks Wanted

These organizations also seek health insurance deductibility and individual deductions of qualified long-term care insurance premiums as well as tax equity for sole proprietors and S corporations with respect to deductions of the cost of health insurance from business income. Sole proprietors, partners in partnerships, and S corporation owners pay self-employment tax on insurance premiums, according to NASE.

The self-employed are the only segment of the business population that must pay this extra tax on insurance.

Business owners in the survey also wanted to see medical liability reform and increased use of information technology in the health care sector.

In addition to the NSBA and the NASE, the organizations surveyed were the Business and Professional Women/USA, the National Association of Women Business Owners, the National Federation of Independent Business, the Small Business and Entrepreneurship Council, the U.S. Chamber of Commerce, the U.S. Hispanic Chamber of Commerce, Women Entrepreneurs Inc., and Women Impacting Public Policy.

Michael Coulter ([email protected]) teaches public policy at Grove City College in Pennsylvania.