Press of Atlantic City

Small Businesses Split On Health Reform

Press of Atlantic City — Monday, August 3, 2009

Staff Writer

Gary Hemmelstein, a restaurant owner in Ocean County, welcomes an overhaul of the U.S. health care system so that he can ensure proper coverage for all of his 32 full-time employees.

"Any type of relief would be much better than what we're doing now," Hemmelstein said Saturday from his Mystic Islands Casino in Little Egg Harbor Township.

Kevin Kleiner, co-owner of Dondero Diamonds & Fine Jewelry in Vineland, sees it another way: If the government is going to get involved with health care reform, it should not mandate that small businesses offer coverage to all of their employees.

"It seems to me if you address the cost of medical care first, then insurance costs would go down and businesses would be more likely to offer it on their own, not because they have to," said Kleiner, who has 10 full-time employees.

Owners of small businesses have become important players in the health care debate in Washington. Potential employer mandates and tax increases have split the business community into opposing ideological camps: one that thinks reform will be a heavy financial burden and another that believes it can stem increasing insurance costs with a government program.

Business groups and chambers of commerce statewide have come out against the proposed legislation. A nearly $1 trillion House bill was approved by a key committee last week and could be voted on in September. The Senate has yet to lock down its own version of the bill.

The House bill, which included concessions to conservative Democrats, would affect businesses by requiring that firms with a payroll of more than $500,000 provide health benefits to its workers, or pay an 8 percent payroll tax. In addition, small businesses would be eligible for a government health care plan, or "public option," to compete with private insurers.

The New Jersey Chamber of Commerce in Trenton says health care reform is needed and there are measures being proposed that could help businesses, such as guaranteeing coverage to people no matter their pre-existing medical conditions. In addition, the chamber says tire number of New Jersey workers insured through businesses with between two and 50 employees has fallen by more than 111,650 in the past decade.

But some of the current reform proposals could lead to job cuts due to increased tax surcharges on business owners, the chamber says. The group is against a public option, employer mandates and other changes to the system.

"We're concerned about the track record of government programs," said Jim Leonard, a chamber senior vice president. "And at a time when the economy is struggling, adding burdens on the business community is the last thing that should happen."

But New Jersey Main Street Alliance, a coalition of almost 300 small-business owners, believes proposals such as tire House bill will help reduce costs over time. In addition, government subsidies and tax credits will help to offset increased health insurance costs, said Eve Weissman, the health care campaign coordinator for New Jersey Citizen Action, an advocacy group that is operating the state alliance.

"There are small-business owners who want the creation of a public health insurance plan," she said. "They're being crushed under escalating costs."

Business owners Hemmelstein and Kleiner say their employees' medical coverage has been reduced over the years because of growing costs.

Both said they used to cover 100 percent of their workers' health insurance, but now Hemmelstein says he covers up to 70 percent, while Kleiner said he covers up to 80 percent.

"We've tried to change our deductible, but the percentage of our cost structure that has gone into health insurance in the last 10 years has been exploding," Kleiner said.

Through his business's insurance provider, Horizon, Kleiner said he is able to offer employees more choice in coverage, so that they can vary their deductibles or co-pays for prescriptions.

"We need to be competitive in what we offer because that's how we can keep good employees," he said.

Cost of Insurance

Source: Kaiser Family Foundation

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