OPPOSING VIEWS: While advocates like these at a recent rally in Washington clamor for health care reform, small business groups grow uneasy about the rules they’re likely to end up with.  – AP PHOTO/ALEX BRANDON

The health care reform bill passed by the U.S. House of Representatives last week has caused members of one small business group to circle their wagons and call out for help.

Jim Brown, state director of the National Federation of Independent Businesses, said members of the organization are reaching out to their congressmen about mandates in the bill for employer-based insurance and tax penalties against businesses that don’t provide coverage.

The full Senate has yet to agree on legislation, but Brown said the “Baucus bill” proposed by the Senate Finance Committee is a better vehicle for health care reform despite its flaws.

“Our members are just scratching their heads wondering why (the House) would pass a $1.2 trillion bill that really does nothing to address costs,” Brown said. “That’s the head-scratcher. You’ve got an employer mandate in the bill. You’ve got a payroll tax penalty in the bill that employers with a payroll of $500,000 or more will pay a payroll tax of up to 8 percent if they don’t provide ‘qualified’ health insurance to their employees.”

The mandate will discourage small businesses from adding employees, he said.

“The pay or play is just certain to be a job killer,” Brown said. “Our members clearly believe if Congress wants to structuralize unemployment, this bill will do it.”

Talking points

The state NFIB has about 8,500 members with about 1,000 of them based in Memphis. Dan Danner, the national president of the organization, is scheduled to speak to the Memphis members at 11:30 a. m. Wednesday at Regions Bank, 6200 Poplar Ave. There is no cost to attend, but advance registration is required by calling 615-872-5331 or e-mailing valerie.nagoshiner@nfib.org.

Health care reform is at the top of the discussion agenda. The NFIB is not against health care reform, Brown said, because its membership is grappling with rising insurance costs. In Tennessee, the median number of employees for an NFIB member is 10 and only about 1 percent of members have 100 employees or more, he said.

The Baucus bill has provisions that are more in line to meet the needs of small businesses, he said.

“There are parts of the Baucus bill that we like and the reason is they have incorporated part of the Shop Act,” Brown said. “The long and short is it works to address costs. It looks to increase choice. It looks to increase competition. And Chairman Baucus put about 75 percent of the Shop Act into his bill that recently passed the Finance Committee.”

The bill includes small business exchanges to help employers shopping for insurance.

Spending, saving

However, Brown said one concern with the Baucus bill is the cost for the expansion of state Medicaid programs. Although this cost wouldn’t be directly assessed against small businesses, it could spur states to implement new taxes and fees to make up for budget shortfalls.

“They know where this is going if Washington continues to bring these massive spending bills that the states have to pick up a large piece of the tab,” Brown said.

He also said he’s disappointed that Congress has not done more to address the costs associated with malpractice lawsuits and doctors practicing defensive medicine.

“Our membership is very much in favor of tort reform and addressing as what they view as too many frivolous lawsuits out there,” Brown said. “Now, in Tennessee, we seem to have made some progress in that regard. I think from a national perspective our members would like to see some tort reform that brings costs down.”

Another big concern is a more equitable treatment for the self-employed with tax credits toward purchasing insurance. “The tax treatment is different for big business and the self-employed,” Brown said.

The membership is largely opposed to a government-run public option, he said.

“Our members are desperate for reform, but they are desperate for reform that doesn’t structuralize unemployment and prolong recovery out of this recession,” Brown said.