TAX AND SPEND:

Businesses Brace for Health Bill's Costs: Resigned to Passage, Corporate Lobbyists Begin Jockeying for Modifications That Will Buffer the Impact (NEIL KING JR., 12/23/09, WSJ)

Retailers want a longer delay before new employees qualify for company-subsidized benefits. Big employers such as Caterpillar Inc., Boeing Co. and Xerox Corp. want to modify Medicare tax provisions in the Senate bill that would cut their earnings. Small construction companies want an exemption from employee coverage that the Senate bill already applies to other businesses with fewer than 50 employees.

Across the spectrum, businesses worry that a series of new taxes and fees to pay for expanding health-care coverage will push up premiums, particularly for smaller employers.

The Senate bill calls for a nearly $70 billion tax over 10 years on insurance companies, plus a $2 billion-a-year tax on medical devices. Billions of dollars are also meant to be raised from added taxes and fees on wealthier seniors, higher-end insurance plans and tanning salons.

Companies of all sizes have been increasingly burdened by health-care costs, which topped $400 billion in 2007, according to data from the Employee Benefit Research Institute. Unrestrained, that figure is expected to double by 2017. About 70% of workers receive health insurance through their employers.

Groups representing smaller businesses say the threat of increased taxes and premiums could outweigh provisions intended to limit the impact on small employers. The Senate bill "will not only fail to reduce and control the constantly climbing health-care costs small-business owners face, but it will result in new and greater costs on their business," said Dan Danner, head of the National Federation of Independent Business.