Is the Small Business Administration Going to Help Small Businesses Get Out from Under Obamacare?

WASHINGTON – Sen. James Risch is prevailing on the Small Business Administration to assist companies in dodging the requirements posed by the Affordable Care Act.

Speaking at a hearing Wednesday on the SBA’s 2014 budget proposal during a meeting of the Senate Small Business and Entrepreneurship Committee, the Idaho Republican asked if the SBA had “created something within the agency to help small businesses get out from under this -- to get around it as big businesses and medium businesses are doing.”

“Small businesses all over the country are trying to find a way to get out from under all this just as all big business and medium size businesses are,” Risch said. “The difference, of course, is big and medium sized businesses have a gaggle of lawyers and accountants and people who can help them -- human resource officers who can help them get out from under this.”

Small business owners have fewer options, he said, unless they have fewer than 50 employees or see that they work fewer than 30 hours per week.

“And I hear from businesses all the time who are doing just that,” Risch said.

Addressing Small Business Administration Administrator Karen Mills, Risch asked if the agency offers any advice on ways to circumvent the law.

“The thing I get from businesses all the time is, ‘you’ve got to help me on this Obamacare,’” he said.

Mills, who has announced her intention to step down as administrator, said her agency constantly counsels small businesses that are required to comply with the new healthcare law slated to go into effect in 2014.

“Access to affordable healthcare is the No. 1 concern, as you know, of small businesses all over the country and their major concern is they pay 18 percent more than big companies just because they’re small,” Mills said.

More than 96 percent of all small businesses will be exempt from the Affordable Care Act’s provision requiring companies to provide health insurance for their employees, Mills said. Regardless, companies that want to provide such a benefit for their employees at an affordable cost should be able to do so “because there are going to be insurance companies bidding on their business in an open and competitive environment.”

“Right now, if you are a small business and you want to provide healthcare, you can barely get a quote,” she said. “Now, if you have an affordable health care marketplace which will exist in every state by next fall, there will be enrollment and by next January small businesses will have the opportunity -- not the requirement but the opportunity -- to participate and buy healthcare on those exchanges.”

The response did little to appease Risch, who argued that rather than affordable healthcare the top priority among businesses “is staying in business.” Many are facing difficulties doing so “because they can’t compete when the government tells them they’ve got to spend money on something they don’t want to spend money on or they want to spend money the way they want to spend it not the way Washington, D.C., and the people who work here tell them they have to do business.”

Gesturing behind him toward a stack of documents about seven feet high – a “red tape tape” Senate Minority Leader Mitch McConnell (R-Ky.) has been using to represent the regulations to implement the Affordable Care Act – Risch said businesses “are trying to get out from under this.”

“They’re trying to get away from it,” Risch said. “They’re trying to get around it. They’re not embracing this. You don’t see anyone coming up hugging this stack of documents saying, ‘look this is what I want to do.’ They want to get away from this.”

Undeterred, Mills said her office provides “clear and detailed explanations” on the potential impact of the law.

“One of the things we’ve seen is many small businesses don’t know that they are eligible for a healthcare tax credit and one of our jobs is to walk them through their eligibility and see if they are,” she said.

Sen. Ben Cardin (D-Md.) also defended what is popularly known as ObamaCare, a plan that requires all Americans to obtain health insurance, some through federal subsidies.

Cardin said the controversial initiative “has provided an opportunity for small businesses today who have been shut out of a competitive market to get into a competitive market to provide health benefits to their employees and to do it in an affordable way with (tax) credits and more accurate premiums.”

Risch, the committee’s ranking Republican, having succeeded the departed former Sen. Olympia Snowe, of Maine, in January, displayed little patience for reviewing the administration’s SBA budget request that “we all know will never become law.”

“And if we’re going to do things like this it really ought to be pragmatic and be dealing with something that really is going to become law,” he said.

Nonetheless, Mills told the panel that the proposed 2014 budget of  $810 million “is focused on job creation and accelerating our economic growth,” while simultaneously coming in $109 million below this year’s level.

The savings is attributed to a cut in the subsidy for the popular 7 (a) business loan program, which the administration believes is viable as a result of declining default rates. In addition, the SBA has proposed waiving the fees for lenders and borrowers on loans of less than $150,000, which she said will provide small businesses with greater access to capital.

Mills also said the SBA seeks to reinstitute the 504 loan program, which is directed toward commercial real estate development. It expired on Sept. 30.

Lawmakers generally reacted positively to the package although Sen. Mary Landrieu (D-La.), the committee chairman, expressed disappointment over the administration’s failure to fund the STEP program aimed at assisting small businesses enter the international marketplace. Currently, only one percent of small business is involved globally but there exists “potential for the other 99 percent because of the Internet and technology.”

The feedback on the STEP program, she said, was “very enthusiastic.”

That expertise as to how to navigate challenging rules and regulations is important, she said.

Landrieu also expressed concern over proposals to cut small business development centers and women’s business development centers. Mills said those programs will be bolstered by a new initiative.