Question of the Week: Health Care Reform
These questions are culled from phone calls, letters, faxes and e-mails sent to my Thousand Oaks, Solvang, and Washington offices. Each week I will add another question and answer.
Week of July 24, 2009
• Question: How will the proposed health care reform bill affect employers?
→ Answer: H.R. 3200 requires employers to pay 72.5 percent of the cost of health insurance premiums for single, full-time employees and 65 percent of the cost of a family policy.
The bill would increase taxes on employers who cannot afford to offer health care insurance. The size of the tax increase depends on the size of the employer’s payroll.
• Employers with annual payrolls between $250,000 and $300,000 would be required to either offer insurance or pay a 2 percent payroll tax, or between $5,000 and $6,000 per year.
• Employers with annual payrolls between $300,000 and $350,000 would be required to pay a 4 percent tax, or between $12,000 and $14,000 per year.
• Employers with annual payrolls between $350,000 and $400,000 per year would be required to pay a 6 percent tax penalty of between $21,000 and $24,000 per year.
• Employers with annual payrolls above $400,000 would be required to pay an 8 percent tax penalty of at least $32,000 per year.
This is in addition to the surtax of between 1 to 5.4 percent on families and small businesses making more than $350,000 per year.
This proposal will increase taxes on approximately 80 percent of our nation’s small businesses. Small businesses employ half of all workers in the United States, and small businesses create up to 80 percent of all new jobs. Most economists agree these proposed tax increases would discourage employers from hiring new workers or increasing wages.
I have always supported efforts to make health care insurance more affordable by lowering taxes and providing tax credits for people who cannot afford to buy insurance. I have also supported allowing small businesses to form associations in order to buy group health insurance for their employers and am a cosponsor of H.R. 2360, which would create a health insurance pool for small businesses and the self-employed. Throughout my time in Congress, I also have supported eliminating frivolous medical malpractice claims.
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