September 08, 2004
Number of Working Uninsured Increased in 2003
The number of uninsured Americans increased once again last year, in large part due to the higher number of workers without employment-based coverage. Rising premium costs hit small businesses particularly hard, forcing many micro-business owners to stop offering health benefits to employees.
“Micro-business owners know all too well the challenge of providing benefits to employees,” said Robert Hughes, President of the NASE. “It is not a problem of ‘won’t’, but a problem of ‘can’t.’ With few options and increasing cost, health coverage is not easily obtainable for the nation’s smallest employers.”
According to a new report by the U.S. Census Bureau, 45 million people did not have health coverage in 2003, up 1.4 million from 2002. The percentage of workers covered by their employers dropped from 61.3 percent in 2002 to 60.4 percent in 2003, the lowest level in a decade. The NASE attributes much of the increase in the working uninsured to the rising cost burden of premiums on micro-businesses.
On behalf of its 250,000 member businesses, the NASE advocates for legislative relief to the growing crisis of the uninsured, particular for the self-employed and micro-business owners. To make health coverage more affordable, the NASE supports health care tax credits, association health plans, and the elimination of the self-employment tax on health insurance premiums.
For more information on the NASE health coverage legislative agenda, visit http://advoacy.NASE.org. To read the Census report on the rise in uninsured, visit http://www.census.gov/hhes/www/income03.html.
New Overtime Regulations Could Affect Your Payroll
New overtime regulations that took affect August 23 could affect the way you pay employees. The regulations now guarantee overtime protections to 6.7 million workers earning up to $23,660 per year. The Department of Labor, the federal agency that administers the rules, estimates that about 1.3 million salaried white collar workers will gain up to $375 million in additional earnings per year and another 5.4 million salaried workers will get a guarantee of overtime rights.
For salaried workers earning more than $23,660 a year, assessment for overtime pay will be based on a duties test that describes what tasks determine a worker’s overtime eligibility. A complete description of the rules, including online seminars, can be found at
http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm.
NASE Members can also ask personalized questions to Shop Talk, a toll-free help line and free online service that gives NASE members access to small business specialists. Access your Shop Talk benefit at http://shoptalk.nase.org/shoptalk.asp.
SBA Provides Small Business Economic Overview
Several reports released by the Office of Advocacy of the U.S. Small Business Administration over the past month attempt to paint a fuller picture of how small business impacts the economy, and how economic conditions, in turn, affect the growth of small business.
Starting with a review of the 2001-2002 economy (http://www.sba.gov/advo/stats/sb_econ02-03.pdf), the Office of Advocacy concluded that difficult times for small business were linked to the information revolution, particularly with the burst of the high-tech bubble and 2001 recession. In 2003, conditions were more favorable for entrepreneurship, including a net increase of 18,100 employer firms across the country (http://www.sba.gov/advo/stats/sbei03.pdf). In addition, 369,000 more people became self-employed that year, an increase of 3.7% over 2002.
These circumstances for small business laid the foundation for job gains in 2004. During the second quarter of this year, proprietors’ income increased at an annualized rate of 14.8 percent. The report (http://www.sba.gov/advo/stats/sbqei0402.pdf) also notes that interest rates remained low with the prime rate at 4.0 percent while the rate for small business loans of less than $100,000 averaged 4.2 percent. And, the 2.8 percent increase in Gross Domestic Product (GDP) marked the eleventh consecutive quarter of positive real output growth since the recession of 2001.
More statistics and information on all of these reports can be found on the Office of Advocacy Web site:
Congress Returns from Summer Recess in Districts
After a month-long work period in their home states and districts, Congress returns to Washington, D.C., this week in the hopes of finishing up their legislative business before the November elections. The NASE is hard at work securing supporters for its top advocacy priority, and NASE Members can help encourage their legislators to back the elimination of the self-employment tax on health insurance premiums.
Two bills in Congress now, H.R. 1873 and S. 2433, strike at the inequities faced by the self-employed as the only business group required to pay taxes on health care costs. Both bills call for eliminating the strong tax penalties imposed on the self-employed which currently require them to pay a 15.3 percent “self-employment tax” on all of their health care expenses. The pending legislation would enable the self-employed to deduct their health care premiums as a normal business expense, as larger corporations already are allowed to do.
Before Congress leaves Washington again in October to prepare for the elections, urge your Members to support this critical legislation. Visit the NASE Legislative Action center at http://advoacy.nase.org and email your legislators by simply supplying your zip code.
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