One one hand, you could say employers owe a vote of thanks to the Blue Dog Democrats for easing the burden that small business might have to bear under the Obama administration’s healthcare reform legislation. On the other hand, you might argue there’s not all that much to be thankful for.
The Blue Dogs, a group of rightish Democratic House members, threatened to scuttle discussion of the healthcare reform measure unless cuts were made. Party leaders agreed to some compromises that would soften the blow for employers. The proposal now:
- exempts businesses with annual payrolls of under $500,000 from penalties for not providing health coverage to workers. Earlier versions of the bill set the ceiling at $250,000.
- still would impose an 8% surtax on companies that don’t offer health insurance, but would impose penalties on a sliding scale for payrolls between $500,000 and $750,000. The penalty on a $500,000 annual payroll: 2%.
Not surprisingly, Republicans and groups like the National Federation of Independent Business weren’t impressed with the changes, saying the proposal’s still too costly for small companies and will end up killing jobs.
One interesting omission in the Blue Dogs’ new deal: There’s no mention of the original bill’s proposed surtax on the rich.
Here’s how that breaks down:
- Individuals with incomes over $280,000 a year or joint-filing couples with incomes over $350,000 would face additional taxes, figured on a sliding scale, of between 1% and 5%.
- Starting in 2011, a family making $500,000 would pay an additional $1,500 in federal taxes. At an income of $1 million, the surtax would be $9,000.
Finally, the Blue Dogs also convinced party leadership to postpone a vote on healthcare reform until September.
A lot can happen between now and then. We’ll keep you posted.