A wary take on health care bill

Every time I write about the new federal health care legislation, I seem to get tossed into a debate about politics.

Politics and the Obama administration's efforts to reform health care are closely intertwined, so that's no surprise.

The issue is further complicated by the fact that the new laws are, in fact -- complicated -- so it's a tough topic to write about. That said, I thought I'd try to write about it today, anyway, based on a talk last Friday before the Greater Marysville Tulalip Chamber of Commerce.

The speaker was the lobbyist for the Association of Washington Business, so that puts a political slant on it right there. But I thought Donna Steward of the association raised a lot of good issues, so I thought I'd pass along a few of the things that she thinks the state's business people need to keep an eye on as the health care changes evolve.

Steward noted that employers won't be required to provide health coverage to their employees. But she noted that starting in 2014, businesses with more than 50 employees will pay a penalty each month if they don't provide it and they have employees who qualify for a federal subsidy to pay their health care premiums.

She said that estimates suggest the penalties paid between 2014 and 2019 could be $52 billion.

Steward noted that smaller companies could get a tax credit for providing health care benefits. From this year until 2013, businesses with fewer than 25 employees with an average wage of less that $50,000 would be entitled to a credit of 35 percent of their allowable premium costs. The number goes up to 50 percent. From 2014 to 2016.

The new rules will require businesses to keep additional records and to report more information to the government, Steward said.

Next year, businesses must start reporting the value of the health care benefits paid to each employee on their W-2 forms. In 2012, all businesses must submit a 1099 form to the government for all transactions exceeding $600.

"The government is trying to cut out the underground economy and to stop individuals who are not paying their taxes," Steward said about the reporting requirement.

She said the transactions go beyond just paying people for their time and include purchases of things like equipment or paper.

"It's going to be quite a burden for employers to do this," she said.

Other employer responsibilities include:

• This year, employers with 50 or more workers must provide a private space for breast-feeding women to express milk that is not a restroom.
  
  
• In 2011, employers need to provide automatic payroll deductions for employees participating in national long-term care insurance.
  
  
• In 2014, employers with more than 200 employees must automatically enroll all new employees in the employer's health plan.

In addition to new responsibilities, employers will have some new taxes and fees, including an increase in Medicare payroll taxes of 0.9 percent for employees who earn more than $200,000.

She noted that The Boeing Co. alone will have to levy its employees an additional $150 million for what she called the high earner tax hike.

Employers who have overly generous health care plans will have to pay a 40 percent excise tax, Steward added, saying such Cadillac plans are generally intended to help businesses attract workers in highly competitive industries.

Steward noted that several lawsuits have challenged the plan and also suggested business people should continue to seek changes in Congress.

"We need more voices from the business community," she said. "Everyone is running their company and trying to survive in these tough economic times, but the times are going to get worse."

Mike Benbow: 425-339-3459; benbow@heraldnet.com