• NASE Takes Health Coverage Concerns to Congress and the Administration
• SBA Launches Online Employer Identification Number Application
• New Month and Web site for Women Business Owners
• Legislative Update: AHP bill introduced in the Senate
• IRS: Clarification of Reporting Health and Accident Insurance Premiums
   

NASE Takes Health Coverage Concerns to Congress and
the Administration
 

Access to affordable health coverage was an important issue for the NASE in Washington, D.C. this past week. NASE President Robert Hughes told the House Small Business Committee that self-employment deduction for health insurance premiums, association health plans and health care tax credits would go a long way to ease the burden of micro-business access to health coverage.

Kristie Darien, NASE director of government affairs, echoed Hughes’ comments at a roundtable discussion led by the National Women Business Council.

“The state of health coverage among the nation’s smallest businesses is critical,” she said.

Statistics from the NASE “Affordability in Health Care: Trends in American Micro-Business” study were cited at both events as showing empirical evidence of the need for reform. The self-employment deduction on health insurance premiums, association health plans and tax incentives were discussed as solutions to the immediate problem of cost.

“Yet, there is no silver bullet,” Hughes told the committee. “The NASE is committed to finding proactive, not reactive, solutions to the root causes of continual health insurance premium increases.”

Read the NASE testimony
 

SBA Launches Online Employee Identification Number Application

The U.S. Small Business Administration (SBA) estimates that small businesses could save hundreds of millions of dollars by using a new Internet-based system that will allow them to register their business at the state level and apply for and receive their Federal Employer Identification Number at the same time. The new application can be found at http://businesslaw.gov/template.cfm?catid=10044, by clicking on Integrated State Registration & Federal EIN Application.

The new service was developed by the SBA, in partnership with the IRS and through a contract with EzGov, a major e-government technology provider. The Internet-based process will save both time and close to $200 million for the more than four million small businesses annually that apply in a manual process.

The SBA online application will streamline the state and federal application processes by automating the exchange of applicant data between states and the federal government. Because it is built with a Web services interface, any participating state can quickly and easily offer a seamless state registration and federal EIN tool that, in addition to saving time and money, reduces the burden to the business owner.

This integration, coupled with the interview style form, will prompt users to input the necessary information for both state and federal applications without the redundancy of completing separate forms. The states of Georgia and Illinois are the first partners participating with the SBA on this intergovernmental solution, with additional states expected to join soon.

“The launch of this Web-based service demonstrates how the SBA is partnering with both government and industry to create a customer-driven government,” said SBA Administrator Hector V. Barreto. “It also shows our commitment to reduce the burden on small businesses and save them money.”
 

New Month -- and Web site -- for Women Micro-Business Owners

President Bush proclaimed March 2003 “Women’s History Month,” noting the accomplishments of women micro-business owners throughout America’s history.

“This month, as we celebrate remarkable women in our nation's past, I encourage all citizens to recognize the countless American women whose efforts continue to enhance the economic, social, and cultural life of our great -nation,” Bush said.

The President included stories of two women entrepreneurs in his proclamation – Mary Kies, the first woman to receive a U.S. patent for her method of weaving straw with silk, and Madam C.J. Walker, who started her own African-American hair care products business, which grew to employ over 3,000 people in its first decade.

As evidence to the growing importance of women-owned businesses, two Bush Administration offices have joined with small-business groups to produce a “one-stop shop” Web site for women micro-business owners, launched this week.

The new site, www.Women-21.gov, is sponsored by the U.S. Small Business Administration and Department of Labor. It combines helpful links, resources, online training and Web casts from government departments and sets them up in one easy to navigate location.

The NASE is proud to be a partner with www.Women-21.gov.
 

Legislative Update: AHP Bill Introduced in the Senate

A few weeks ago, Washington Watch reported that the Small Business Health Fairness Act of 2003 (H.R. 660) was introduced in the House of Representatives. This week, Senate Committee on Small Business and Entrepreneurship Chairwoman Olympia Snowe (R-ME), and Sens. Kit Bond (R-MO) and Jim Talent (R-MO) introduced the bill, which provides for the creation of association health plans, in the Senate. AHPs are one of the NASE legislative priorities for this year.

For more information about association health plans or the other NASE legislative priorities, click here.
 

IRS: Clarification of Reporting Health and Accident Insurance Premiums

(The following “Headliners” article has been provided by the IRS Taxpayer Education and Communication office in an effort to educate micro-business owners and make it easier to fulfill their tax obligations. For more articles, or for more information about any of the information contained in this article, please contact the IRS Small Business/ Self-Employed division.)

The IRS would like to clarify the proper reporting of S corporation payments of health and accident insurance premiums made on behalf of its greater than 2% shareholder-employees continues in the manner reflected in Revenue Ruling 91-26, 1991-1 CB 184, as clarified in IRS Announcement 92-16, 1992-5 IRB 53.

The cost of these health and accident insurance premiums paid on behalf of the greater than 2% S corporation shareholder-employee (hereafter referred to as “shareholder”) is deductible by the S corporation and reportable as additional compensation to the shareholder.

This additional compensation is included in Box 1 (Wages) of the Form W-2, Wage and Tax Statement issued to the shareholder. If these payments are made under a “plan” for the S corporation employees and their dependents, the amount would only be subject to income tax withholding, and would not be included in Boxes 3 or 5 of Form W-2 wages for Social Security or Medicare, nor would it be subject to the FUTA tax. Form K-1 (1120S) and Form 1099 should not be used as an alternative to the Form W-2 to report this additional compensation.

The payments of the health and accident insurance premiums on behalf of the shareholder may be further identified in Box 14 (Other) of the Form W-2.

 

Do any of these issues affect you? Do you want to be proactive in helping the micro-business community? Visit the NASE's Legislative Action Center and “Tell Your Small Business Story.” This will help the NASE understand - on a personal level - how key legislative issues are affecting your business and your bottom line.

For more information about any of the articles in Washington Watch, contact Maureen Petron, NASE public affairs manager, at (202) 466-2100 or mpetron@nase.org.