Baltimore's small businesses frightened health care overhaul

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The owner of Aegis Title Associatexs LLC hascut employees’ hours, sublet office space and stopped ordering promotionao products. But the Glen Burnir businesswoman faces another potential threat to her Crippling healthcare costs. Grim already pays half her healthcare tab, but a proposal on Capitol Hill woulcd force her to pay nearly three-quarters of the bill or pay an 8 percentg tax on her payroll. Those are two piece s of a sweeping U.S. health care reform package being considerecdin Washington, D.C. But Baltimore-area small-busines owners say the so-called “payg or play” provisions could drive them toward insolvency and prompyt others to scaleback hiring.
Neithe r outcome would help the country escap ethis recession, they say. “Thatt would be a hardship for Grim said. “It’s going to put people out of businesa if they are forced todo that.” With 50 milliojn Americans lacking health insurance — about 760,0000 of them in Maryland — expandinhg health coverage is a top legislativ priority for President Obama. Health care spending will consume 20 percent of the nationall gross domestic product by it currently consumes15 percent. The U.S. spent more than $2 trillionb on health care in 2008.
Thoughg federal lawmakers’ goal is to curb risingy healthcare costs, small-business owners say they will pay more out of theirr own pockets if some proposal s in a drafted House bill make it into finapl legislation, which could come this month. Other smalkl employers are hopeful the reforms could reduce health carecostsa — but it could also mean higherd taxes down the road. With theirf health insurance premiums rising by as much as 30 percenfper year, many small-business owners already feel smothered by health care costs. Paying for health care is one of theid biggest expenses and has become more burdensome as profits erode duringa recession.
In spite of that, many smalpl employers offer health insurance in order to retai ntop employees. “Small businesses live on meager saidEdwin “Tee” Tillman, owner of Columbia’se Colony Title Group Ltd. “If our taxes increase to the poiny wherewe can’t function they’re closing us ‘Counterproductive’ reform? The health care reform plan brought by the Houser is focused on health care access for the uninsurerd and underinsured.
The plan’s other proposals • Taxing health benefits for plan that cost morethan $6,800 for individualsx and $17,240 for families; • Offering a government-sponsoref health insurance plan; and, Creating an exchange where small businesses coulcd shop for insurance. Yair president of Baltimore softwarsefirm , does not oppose the proposals. He pays half of his 10 health care premiums and is not opposeds to raisingthat contribution. But he wouldr probably reduce salaries to cope with theadditionalo cost. Today, Grim pays $250 per month to cover two of hersevenb full-time employees — a total bill of aboutg $6,000 a year.
But if the government mandates coverage and more of her employees join herhealth plan, that cost could approacuh $30,000 a year if benefits remain the That sum does not include the provision most troubling to some business owners the idea of taxing health By taxing health benefits, the government, in would discourage employers from providing benefits at all. Some employers may opt to cut all health coveragefor employees, thus facin the 8 percent payroll tax to help fund the government’s insurancr plan.
“It seems counterproductive to tax employersw who are willing to payfor benefits,” said Dan owner of Take One Digital Media, an 8-person multimedia company in Annapolis. Powell pays, on average $4,800 per employee for health insurance. So he would not be impactex by the taxfor now, but coul in the future if he pays more. Some small-business ownersz also fear the unknown. How much will the plan cost, they wonder? House Democrats declined to say how much theirt plan would cost when they unveiled it last The U.S.
Senate, which is drafting its pegs the cost of proposalsat $1