W.Va. small businesses part of health care debate

CHARLESTON (AP) — With the U.S. Supreme Court expected to rule this month on the federal health care law, its supporters are touting its potential benefits to West Virginia’s small businesses. But some of these employers are among the overhaul’s biggest critics.

A recent report by the group Families USA highlights tax credits meant to encourage small businesses to provide coverage for employees. It estimates 16,730 West Virginia businesses employing 91,600 people qualify for these credits.

The credits available to West Virginia employers were worth $80.7 million, or about $881 per worker in 2011, the report said. Perry Bryant, executive director of West Virginians for Affordable Health Care, noted 7,030 small businesses in the state qualify for the maximum credit, worth 35 percent of the employer’s share of policy premium costs. The value of that credit will increase to 50 percent of the employer’s share in 2014.

“The Affordable Care Act has some great potential for some small businesses,” said Bryant, whose group has championed the federal law.

Terrell Ellis obtained credits for her Charleston-based consulting firm, Terrell Ellis & Associates, and its four employees. Ellis noted her business offered health coverage before the credits became available.

“It’s an incentive to continue to provide that coverage,” Ellis said.

But the federal law’s opponents include the National Federation of Independent Businesses and its West Virginia members. One of these members, owner David Klemencic of Ellenboro Floors in Ritchie County, is among a handful of individual plaintiffs in one case challenging the overhaul now before the U.S. Supreme Court. The justices are expected to rule toward the end of this month.

The NFIB’s West Virginia chapter recently held a forum on the law in Wheeling along with the local chamber of commerce. The event focused on the tax that it will require insurance companies to pay starting in 2014. Businesses expect insurers to pass this tax along to them and other policyholders in the form of higher premiums. These critics estimate the higher costs will increase premiums for an employee with a family plan by $500 annually, and sap the sales of West Virginia small businesses by $1 billion between 2014 and 2021.

“Looking at the big picture, if this is fully implemented, then the largest sector of employers in West Virginia would take a direct hit financially,” said Gil White, executive director of the West Virginia NFIB chapter. “In many cases, it would be a hardship that the business community is telling us they can’t afford.”

Those who spoke at the Wheeling forum include Tom Susman, managing member of TSG Consulting. Susman’s public relations and lobbying firm, based in Charleston, provides health insurance to its five employees. Susman’s resume includes a term overseeing the West Virginia Public Employees Insurance Agency and other insurance-related offices in the Democratic administration of former Gov. Bob Wise. He said he decided to speak out as a business owner, and is also working with a coalition of business and trade groups, Stop the HIT, seeking the health insurance tax’s repeal.

“We’ve provided health insurance. We’ve done the right thing since we’ve been in business, and we’re facing this hidden tax. I don’t think that’s very fair,” Susman said.

Bryant cited the purpose of the tax: to fund provisions of the federal law that will gradually expand coverage through such programs as Medicaid, to reduce the ranks of the uninsured. He estimated the average family pays an additional $1,000 on annual premiums because of the shifting of costs from hospitals and other providers treating people who have no coverage.

Bryant said his group has met with the state’s acting insurance commissioner to enlist that office and regulators at the West Virginia Health Care Authority, to ensure any savings from expanding coverage translate into premium breaks.

“We are very, very focused on that issue. We believe very strongly that small business and all commercial policyholders should benefit,” Bryant said. He also added, “Let me be blunt. It will be difficult to capture that.”

Ellis said she supports this provision and other parts of the federal overhaul partly for this reason.

“If more people are covered and things like preventive care are included in that, then perhaps that cost will flatten out,” Ellis said. “That would be my hope.”

But Susman said this approach toward insuring more people comes at the expense of his business and others that have tried to do the right thing.

“Why should we be penalized by paying for a program to help companies that haven’t provided insurance?” Susman said.

Susman also noted that his small business doesn’t qualify for the credits because its annual wages are too high, and that the credits — unlike the tax — are temporary. Bryant called the eventual phase-out of the credits one of the federal law’s shortcomings.

“Small businesses really struggle to provide health care for employees,” Bryant said. “But at the same time, this small business tax credit is a step in the right direction and can be very helpful.”

But if the credits are proving a tough sell in West Virginia, they are elsewhere as well: time-consuming to apply for and lacking enough financial reward to make it attractive, the credit was claimed by only 170,300 businesses out of a pool of as many as 4 million potentially eligible companies nationwide in 2010.

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