• Association Health Plan Legislation Soars Through House
• Close Call for CAFTA
• NASE Members Speak Out on Federal Tax Reform
• August Member Poll: Retirement Security
• REMINDER: Covering Kids and Families Back-to-School Campaign Kicks Off This Week
• House and Senate in Recess

Association Health Plan Legislation Soars Through House

Last week H.R. 525, the Small Business Health Fairness Act, passed with bipartisan support in the House of Representatives. The bill was introduced by representatives Sam Johnson (R-TX), John Boehner (R-OH), Nydia Velázquez (D-NY), and Albert Wynn (D-MD) in early February. Senator Olympia Snowe (R-ME) has introduced its companion bill, S. 406 in the Senate. The bill would allow small businesses to band together through associations to purchase health coverage at a lower cost. The NASE supports association health plans to improve access and choice for the self-employed and micro-businesses with regards to medical coverage for themselves and their employees. Association health plans (AHPs) would help the self-employed and micro-business owners receive cost effective and comprehensive health coverage by allowing them to purchase insurance in large pools through bona fide associations. AHPs can reduce health coverage costs by 15 percent - 30 percent by allowing small businesses to join together to obtain the same economies of scale, purchasing clout, and administrative efficiencies now available to employees in large employer and union health plans. “Micro-businesses are so important to this nation’s economy,” said NASE executive director of the legislative office, Kristie Darien. “It is critical they be able to access adequate health coverage at affordable rates.” The battle for AHPs has moved to the Senate. For more information on association health plans or to contact your senators to encourage them to vote for S. 406, visit the online NASE Legislative Action Center at http://advocacy.NASE.org.

Close Call for CAFTA

President Bush and Republican leaders had a major victory last week but for some, the vote was too close for comfort. The Central American Free Trade Agreement (CAFTA) passed in the House of Representatives, 217-215. This narrow victory included 15 Democrats breaking party lines to vote for it and 27 Republican defections voting against it. The trade agreement would be with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and includes a pact with the Dominican Republic. Congressional leaders had difficulty gaining support from legislators in sugar and textile-producing states. The outcome of the vote, which went on for over an hour, was uncertain until the very end. Straggler voters negotiated who would vote in favor to get the bill passed and who could vote no to avoid political consequences. Proponents claim the bill is necessary to support newly democratic governments and open up jobs and trade in those markets. Opponents fear that the U.S. will lose jobs and illegal immigration may rise. For more information about CAFTA, visit http://thomas.loc.gov/ and search for H.R. 3045.

NASE Members Speak Out on Federal Tax Reform

Many micro-business owners spend eleven or more hours filing federal tax returns and many blame the difficulty on the complexity of the federal tax system, according to a recent online member poll by the NASE. Forty percent of respondents spend eleven hours or more on tax filing with 14 percent spending over 25 hours filing. The number one response for the most burdensome aspect of federal tax system was complexity (34.7 percent). “Most micro-business owners run every part of their business, including doing their own finances and accounting. This includes taking time away from growing their businesses to try to maneuver a complicated tax system.” said NASE president Robert Hughes. “As President Bush’s tax reform panel considers changes to the current tax code, I implore them to come up with a simpler, more user-friendly tax code that micro-business owners can manage.” Besides complexity of the tax system, respondents cited the tax rates (21 percent), inequality in the tax code (10 percent), and amount of paperwork (9 percent) as burdensome aspects of the tax code. One-third of respondents used a tax filing software program to calculate federal taxes but only 7.3 percent filed electronically and 5 percent filed entirely by hand. About half of respondents hired a tax preparer to file their taxes. Overall, respondents favored changes to simplify the tax code including simplification of the current tax system by minimizing tax forms and creating easier instructions (88 percent) and by removing unfair regulations (85 percent). Over half of respondents (52 percent) favored keeping the current system but want further targeted tax cuts and deductions for the self-employed. Which factor do you feel is the most burdensome aspect of the federal tax code? The NASE supports the elimination of the self-employment tax on the cost of health insurance, simplification of the home office deduction and clarification of independent contractor classification. Keith Hall, an NASE TaxTalk expert, testified in front of the House Small Business Committee on the need for tax paperwork reduction. In addition, the NASE formally submitted comments to President George W. Bush’s Federal Advisory Panel on Federal Tax Reform. To see the full results of the survey, visit http://advocacy.nase.org/membersurvey/default.asp. August Member Poll: Retirement Security

Take the online member poll on retirement security. The NASE strongly supports savings incentives that will promote self-reliance by encouraging individuals to prepare for retirement. Please take this short member survey to inform us on how prepared you are on retirement and how this issue affects you and your business by visiting the MyNASE Web site at http://my.nase.org/. Log in to your free MyNASE Web Account. If you have not set up an account, you can do so at http://my.nase.org/. Take this survey during the month of August.

REMINDER: Covering Kids and Families Back-to-School Campaign Kicks Off This Week

Over 8 million children do not have health insurance in this country with more than half of that number being African American or Hispanic children. The NASE recognizes the need for affordable health care coverage in this country and is teaming up with many national organizations in support of Covering Kids & Families Back-to-School Campaign. The campaign’s purpose is to encourage parents to enroll children in low-cost or free health coverage. An estimated 4 million uninsured children, as well as millions of adults, qualify for such programs as Medicaid and State Children’s Health Insurance Programs (SCHIP), or other state-sponsored programs. However, many people are unaware of such programs or find it difficult to enroll. Statewide and local events throughout early August will inform families of their health options. The campaign kicked off yesterday with Major League Soccer players Freddy Adu and Jaime Moreno, U.S. Surgeon General Richard Carmona, and DC mayor Anthony Williams. The NASE works year-round to make health insurance more affordable for micro-business owners. The association continues to fight for the elimination of the self-employment tax on health insurance costs and supports health care tax credits, health savings accounts and association health plans. DC United Soccer Superstar Freddy Adu. For more information on the NASE's position on health care, visit http://advocacy.nase.org/. Visit http://coveringkidsandfamilies.org/ or call 1-877-KIDS-NOW for more information and updates on events in your area during the month of August. House and Senate in Recess The House and Senate adjourned last week for summer recess, when they will return to their districts for constituent work and vacation. Washington Watch will be on hiatus during this recess, but will alert you of any pressing small business issues. As always, you can stay up to date on the NASE advocacy efforts at http://advocacy.nase.org.