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Small Contractors Excluded from Small Business Exemptions in Health Care Bill
By: Jerry Henderson
Jerry Henderson
National Industry Partner
Audit
Construction & Real Estate
Louisville
502.581.0435
Congressional leaders are continuing in conference to negotiate a merged Senate and House version of the health care reform bill. Small contractors are the only employers explicitly excluded from small business exemptions contained in the bill. This exclusion came in the form of an amendment to the original Senate bill shortly before it was voted upon in late December.
U.S. Sen. Jeff Merkley proposed the amendment. A Merkley spokeswoman told The Wall Street Journal the goal was to level the playing field for companies that have to bid against others who might not be providing health care coverage. She said 90 percent of construction firms employ fewer than 20 employees and that the 50-employee threshold in the bill would have exempted most of the construction industry.
The exemption was built into the bill because many in Congress favor an exemption from employer mandates for all businesses with fewer than 50 employees. However, the current conference bill being negotiated still excludes construction industry businesses from the exemption offered to other small employers. Instead, contractors with five or more employees and payroll of $250,000 or greater would have to comply with all employer mandates in the bill, such as offering health insurance or facing stiff penalties.
Many trade organizations, including the Associated General Contractors of America (AGC), are actively working with members of Congress to include the construction industry in the exemptions. Other industry trade groups, such as the National Electrical Contractors Association (NECA), favor the exclusion of small contractors from small employer exemptions. This is a contentious issue with the potential to significantly impact the construction industry.
Click here to read why AGC favors granting small contractors the exemptions extended to other small businesses and here to read why NECA opposes granting those exemptions to small contractors.
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