• NASE Member Testifies to Congress on Micro-Business Access to
  Health Coverage
• New Study Shows 73% of Small Businesses are Online

NASE Member Testifies to Congress on Micro-Business Access to Health Coverage

Consumer-driven health coverage and market accountability, lead by Health Savings Accounts, is the best way for micro-business owners to obtain affordable health coverage for themselves and their employees, testified NASE Member David Alders before Congress last week. Alder’s remarks came at a hearing held by the House Small Business Subcommittee on Workforce, Empowerment and Government Programs.

“Because micro-businesses with fewer than 10 employees often are so thinly capitalized, ours is the sector which perhaps is most squeezed by America’s health care cost crisis,” said Alders, owner of a diversified agribusiness enterprise in Nacogdoches, Texas. “Health Savings Accounts work splendidly to accomplish a basic measure of market accountability.”

Health Savings Accounts (HSAs), which passed with the Medicare overhaul legislation in November, allow individuals with high deductible health insurance plans to save money in a tax-free account for medical expenses. Because they are spending their own money on health costs not covered by the deductible, HSAs encourage a deeper look at the cost of a doctor visit and routine care, Alders said. In turn, leading to a more consumer-driven and accountable health coverage market.

HSAs are an expansion of Medical Savings Accounts, but with more flexibility and fewer restrictions. HSAs allow anyone with a health insurance plan with a deductible of at least $1,000 ($2,000 for a family) to open a savings account for medical expenses. Contributions to the savings account can be as much as the deductible (up to $5,000 or $10,000 for families), and can be matched by an employer.

“Health Savings Accounts also alleviate some of the burden faced by micro-business owners as they attempt to attract skilled, competent workers,” Alders testified. “Micro-business owners are unable to offer the extensive employment packages that large companies give to new employees. However, with the creation of HSAs, employers can contribute annually to their employee’s health costs. Micro-business owners who have been unable in the past to offer a health benefit to their employees, now have a valuable benefit to offer current or potential employees.”

In addition to HSAs, the NASE also advocates for the passage of H.R. 3901, which would allow individuals who purchase high-deductible insurance policies and also fund HSAs to deduct the value of their insurance premiums from their income taxes. H. R. 1873, the Self-Employed Health Care Affordability Act, goes one step further by allowing sole proprietors, regardless of their type of health coverage, to fully deduct their health insurance premiums when calculating self-employment tax.

“We are not under the illusion that tax code changes and the creation of HSAs alone constitute a silver bullet that will solve America’s health care cost crisis, but they are a welcome step toward consumer-driven health care,” Alders told the subcommittee. “The NASE hopes subsequent steps include the reintroduction of other free market principles to the American health care system wherein buyers and sellers of care and insurance can communicate without the distorting static of governmental inference.”

For more information on the NASE legislative priorities for the self-employed and micro-business owners, visit advocacy.nase.org.

New Study Shows 73% of Small Businesses are Online

A new survey by the Office of Advocacy of the U.S. Small Business Administration details small business telecommunications use and spending, offering new insights for policymakers. Some of the findings give a snapshot of what your daily contact with telecommunications is:

• Wireless services are now used by 73 percent of small businesses.

• Of these, 38 percent use dial-up, 26 percent use cable modems, 21 percent use DSL, four percent use satellites, four percent use T-1 lines, and three percent use wireless broadband.

• Small businesses spend a considerable amount for telecommunications services. This report finds that small businesses spend on average $543.17 per month for telecommunications services, 89% of which are for local, long distance and wireless telephone services.

• The cost burden of telecommunications services appears to be higher for very small businesses. For example, firms with 0 to 4 employees spend $82.81 per employee for local and long distance telephone service, while firms with 5-9 employees spend $50.18 per employee and firms with 10-499 spend $20.99 per employee.

To read the entire report, A Survey of Small Businesses’ Telecommunications Use and Spending, click here.