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Health care reform plans to affect small business.

The cost of three leading health care reform plans being considered by a Clinton administration task force would threaten the financial viability of many businesses and place jobs at risk, according to a study conducted for the National Federation of Independent Business. The percentage of jobs at risk would be greater in small businesses than in large ones.

The 21st Century American Health System would require employers to pay between 50% and 100% of the average health care premiums for full-time workers and impose an 8% payroll tax on all part-time wages. The study found the plan would threaten nearly 18.3 million jobs, or 21.4% of total private-sector employment.

The HealthAmerica Plan, introduced by U.S. Senate majority leader George Mitchell (D-Me.), would require companies to pay 80% of each full-time employee's health care premium and 50% of the premium for each part-time employee. The study found the HealthAmerica plan could affect the jobs of almost 12.2 million workers, or 14.2 of total private-sector employment

A third plan, offered by California Insurance Commissioner John Garamendi, would combine the medical components of worker's compensation and automobile insurance into a single comprehensive health package, to be funded by a 7.65% payroll tax paid by employers and a 1.4% tax paid by workers. The study found this plan would put an estimated 7.5 million jobs at risk, or 8.7% of total private-sector employment.

George E. Tucker, Jr., CPA, chief financial officer of Blue Cross and Blue Shield of Mississippi, Inc., believes any broad-based health care proposal would have an impact on small business to some extent but had no opinion on the estimates of jobs at risk contained in the study. However, he says, "if a final health care plan includes all workers, premiums per worker are likely to drop from present levels."

Prentiss L. Faulconer, Jr., CPA, president of Omega Systems, Inc., a marketer of health care software, agrees. He also observes that Medicare and Medicaid deficits now place extra burdens on private plans. "If all patients paid the same rates," he said, "private-sector premiums could be reduced."
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Aug 1, 1993
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