Small Business  

VIRGINIA MAIN STREET ALLIANCE UPDATE # 27

WHATEVER HAPPENED TO HEALTH CARE REFORM IN VIRGINIA?

 

The Virginia General Assembly has punted on health care reform.  They will now wait until July at the earliest and maybe next January.   The really sad part is that it was defeated over pure politics.  Governor McDonnell opposed taking any action even if it leaves Virginia unprepared to implement the Exchange.

 

At least nine bills creating a Health Benefit Exchange (HBE) were introduced in the General Assembly.   While the Governor’s opposition meant that he might ultimately veto a bill, we thought that the support for doing something would result in at least a bill reaching the floor.  But subcommittees in both the house and Senate killed all of these bills.  A senate subcommittee, chaired by Senator Jeff McWaters of Virginia Beach held about 6 hours of hearings and discussions on the bills, but ultimately took no real action. 

 

The public reasoning for taking no action was the Supreme Court case that will be decided in June or July.  (Opponents of action argued that if health care reform is unconstitutional Virginia would not have to do anything.)   So Virginia will not pick up action on this issue by calling a special session of the General Assembly until at least July.  But since the presidential election will be in full swing by then, many observers think that Virginia will wait until after the November election.  But since calling a special session will cost a lot of money, they may decide to wait until the regular session that starts in January.   

 

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Among the reports issued by the Virginia Health Reform Initiative (the governor appointed task force studying health care reform in Virginia) was a study on the potential size of the exchange in Virginia.  The report found that there would be at least 60,000 small businesses with 120,000 covered employees  in the small business exchange.   The full report, along with other reports, can be found at:

http://www.hhr.virginia.gov/Initiatives/HealthReform/MeetingResources/MtgRes.cfm

 

There is a federal income tax credit for small businesses that provide health insurance for their employees.  The credit will carry over into the future if it is not all used in one year.  IRS form 8941 contains information http://www.irs.gov/pub/irs-pdf/i8941.pdf

 

President Obama is proposing that the tax credit for small businesses that provide health insurance be expanded.  Currently the tax credit ends if a business has more than 25 employees or an average wage over $50,000.  The current credit also phases out as a business approaches these limits.  The president is proposing upping the employee limit to 50 employees and changing the phase out so that more businesses that are close to the limit can benefit.  For more information see http://www.whitehouse.gov/blog/2012/02/16/expanding-healthcare-tax-credit-small-businesses

 

A study by the Urban Institute finds that the cost of health insurance for small businesses will fall by 8.2% if health care reform is implemented.  See http://www.urban.org/publications/412295.html for details. 

 

These Updates are a service of the Virginia Main Street Alliance, a Project of Virginia Organizing.  Contact state coordinator Bob Becker at 804-937-0752 or bob@bobbecker.org with questions or comments.