Small Biz Rooting for Trump, Ryan on Obamacare Replacement

Randy Bradley, owner of Burger Kings in Iowa and Missouri for the past 27 years, said he is rooting for the House Republicans proposal to replace Obamacare, especially the Trump-endorsed American Health Care Act’s (AHCA) plan to eliminate Obamacare’s employee mandate provision.

According to Bradley, who employs more than 80 people, Obamacare’s employee mandate – which requires that all businesses with 50 or more full-time equivalent employees provide health insurance to at least 95% of staff and dependents up to age 26, or pay a fee – caused some of his workers to receive worse insurance than they previously had and other employees to experience up to a 20 percent reduction in wages.

“Basically, the government interfered and told me I couldn’t provide my managers with that premium level of coverage anymore and my only option was to provide them with Obamacare,” Bradley told FOX Business. “Furthermore, even if I wanted to reimburse my managers for the premiums they paid for purchasing their own insurance on the open marketplace, I couldn’t without facing major fines.”  

Prior to Obamacare, Bradley said he provided his managers with a competitive group health care insurance policy, in which he contributed 75% of the premium and half of the deductible. However, a non-discrimination clause in Obamacare prevented Bradley from providing this plan to his managers if he didn’t also provide the same plan to his hourly-wage employees, which he said would have bankrupt his business within three to four months.

Implemented under Obamacare, according to Section 4980D of the Internal Revenue Code, if business owners reimburse employees the premiums they paid for purchasing their own insurance on the open marketplace, they are subject to a $100 penalty, per day, per employee — or $36,500 per employee annually.

As for Bradley’s non-managerial, hourly-wage staff, he said a majority experienced a loss in wages due to Obamacare, and many still didn’t qualify for employer-based coverage while many of those who did chose not to take it.

A full-time employee, which must be provided insurance under the Obamacare employer mandate, is categorized as someone that works 30 hours or more per week. Therefore, Bradley said his employees who were working anywhere from 31-40 hours per week had their hours cut down to below 30, thereby not receiving insurance as intended by Obamacare, but actually losing hours, thus wages. For Bradley’s other hourly-wage employees that kept their full-time, 30-plus hour schedule, Bradley was required to offer them Obamacare, in which he would pay 90.5% of the premium and they would contribute 9.5%.

“Ironically, most of my full-time crew that I offered Obamacare to, didn’t take it, as they felt the penalty they would have to pay for not having it was actually less than they would have to spend on the premium to have the insurance,” said Bradley. Only 4 out of Bradley’s 40 full-time, hourly-wage employees opted for him to provide them with Obamacare.  

In addition, Bradley said “the insurmountable amount of time” he had to spend deciphering Obamacare’s rules and filling out the required paperwork, cost him revenue. Without a full Human Resources department given his businesses’ size, Bradley said he did most of the work himself, plus he was forced to hire an outside accounting firm to ensure he was in compliance with the 2,700-page law.

“Obamacare has created fear among business owners that an innocent mistake can cost their business millions in fines,” said Bradley.

National Federation of Independent Business (NFIB) President and CEO Juanita Duggan, who categorizes Obamacare as “devastating to small businesses”, wrote a letter to Congress on March 14 urging each of its members “who cares about small business” to vote for the AHCA measure (which is Speaker Paul Ryan’s Obamacare replacement bill).

“Small business optimism has soared since November because small business owners anticipate a change in policies. Driving that optimism is the expectation that Congress will repeal Obamacare,” said Duggan. “There’s a lot more work to be done in order to make the health care system affordable, flexible and predictable, but the American Health Care Act is a necessary first step.”

Sixty percent of small business owners across the country, like Bradley, are in favor of repealing Obamacare, according to a BizBuySell.com survey of 700 small business owners and prospective buyers.

Respondents of the survey cited the individual mandate as the aspect of Obamacare they’d most like to see repealed (51%), followed by the employee mandate (33%) and government subsidies (34%).

As the bill currently stands, the AHCA would keep several popular provisions of Obamacare, including the following three that small business owners stated in the survey were most important to them: 1) banning the denial of health coverage to people because of pre-existing conditions (55%), 2) the right to keep children on their parents’ insurance plans up to the age of 26 (53%) and 3) prohibiting insurers from charging women higher rates than men for the same services (42%). 

According to the NFIB – a conservative-leaning small-business lobby based in Washington, D.C., small business has long supported repealing and replacing Obamacare.

“The American Health Care Act would repeal the most punishing elements of Obamacare, including the massive tax increases and mandates that have increased costs, limited choices and smothered job creation,” said NFIB CEO Duggan in a statement.

However, most Democrats denounce the AHCA as a cruel attempt to strip Americans of their health care. According to projections by the Congressional Budget Office (CBO), 14 million fewer Americans would be insured after one year under the Republican plan—as “[s]ome of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.”

But small business advocacy groups such as the NFIB argue that the AHCA will provide more health insurance choices, as it reduces health insurance costs for small businesses.

This idea of “choice” is important to Wyoming-based Rayne Faubion, co-owner with her husband of R&R Rig Service, a 30-40 employee oil field company that repairs and moves oil field rigs in the Rocky Mountain region.

Soon after Obamacare hit the market in 2010, Faubion and her husband found that Wyoming, where health care costs are high due to a small population, only had one insurance provider participating in the state’s online marketplace.

“All of the competing companies offering competitive insurance in our state went out of business,” said Faubion. For a family of four, the Faubions went from paying $600 per month for insurance with “decent deductibles and co-pays” to $1,800 per month under Obamacare with worse deductibles and co-pays, she said.

The American Association of Retired Persons (AARP) opposes the House plan, arguing that it would shorten the life of Medicare, hike costs for those who can least afford higher insurance premiums, risk seniors’ ability to live independently, and give tax breaks to big drug and health insurance companies.

“Older Americans want affordable health care – including less expensive prescription drugs and continued protections for the most vulnerable,” AARP Executive Vice President Nancy LeaMond said in a statement released this week. “When Americans over age 50 look at the details of the House health care reform plan, they don’t like what they see.  They don’t want big insurance and drug companies to reap massive profits at their expense.”

It is not just Democrats and groups like AARP, as of Thursday, there was still opposition to the plan from inside the GOP, dividing the party and President Trump.

“We have not cut the deal yet,” said House Rules Committee Chairman Rep. Pete Sessions, R-Texas, as reported by FOX News. At press time, it was still unclear whether the full House vote would happen Thursday, as originally was expected.