Top Republican hits health care law’s burden on small businesses

A key House Republican is warning that the mandate in President Obama’s health care law requiring companies with more than 50 employees to provide adequate health insurance to their workers is so cumbersome that even the parts designed to help firms with compliance will cause headaches.

House Small Business Committee Chairman Sam Graves, Missouri Republican, has sent a highly critical letter to the Treasury Department arguing that the litany of calculations contained in the rule published by the department at the start of the year will burden small-business owners who already have enough on their plates.

Mr. Graves’ committee is among several in the Republican-controlled House warily eyeing the implementation of Mr. Obama’s law. Attempts to repeal the president’s first-term achievement have gotten nowhere, after the Supreme Court upheld key portions of the law in June and Democrats retained control of the White House and Senate in November.

So for now, political opponents of “Obamacare” in the House are highlighting its more controversial aspects, such as the employer mandate and the legal questions surrounding the extension of future tax credits to those who will purchase insurance in state-based marketplaces, or “exchanges,” set up by the federal government.

Mr. Graves said the law is proving particularly onerous for smaller employers.

“Simply put, compliance with the health care law could become a full-time job for them,” he said in his letter on Friday. “Each year, they will be forced to make multiple decisions and calculations just to determine if one provision — the employer mandate — applies to them.”

The law says that companies with 50 or more full-time employees that do not provide adequate health insurance must pay a penalty if employees get federal tax credits to buy their own insurance. Large employers that do not offer coverage must pay $2,000 per full-time employee, beyond their first 30 workers, according to the Department of Health and Human Services.

Small-business advocates say companies flirting with the 50-employee threshold may resorts to layoffs or impose a hiring freeze to stay below the cap.

In his letter, Mr. Graves said the rule is a time-consuming job-killer. He also took exception to the rule’s definition of a “full-time” employee as someone who works 30 hours per week.

“It’s no secret that small-business owners have been struggling with existing taxes, regulations and mandates in a slow economy just to keep the doors open and the lights on,” he wrote. “Now, under the law and this rule, they must take on the added and recurring burden of time-consuming calculations to see if they may be subject to the expensive employer mandate.”

Ways and Means Committee Chairman Dave Camp and Oversight and Government Reform Committee Chairman Darrell E. Issa have asked the Treasury Department for documents that detail its decision to extend tax credits to those purchasing insurance in exchanges set up by the federal government. About half the states have opted for a federally run exchange instead of setting one up themselves.

House leaders say Mr. Obama’s law explicitly states the tax credits should only be extended to those who purchase insurance through a state-run exchange. The Internal Revenue Service issued a rule in May holding that tax credits will be available in both forms of the exchanges, a decision Mr. Issa estimates will boost the cost of the new health care law by $500 billion over the next decade.

Treasury officials have told Mr. Issa they are implementing health care-related tax laws in line with Congress’ intent and that his request skirts the boundaries of legal privilege.