Small-biz group wants easier, less-costly access

By David Flaum, CommercialAppeal.com
January 29, 2008

A shrinking number of small-business owners offer health insurance to workers, so the National Federation of Independent Business wants the Tennessee General Assembly to help change the landscape.

Tax incentives and an insurance pool were two ideas the NFIB's leadership advanced at its annual soiree for legislators.

"Improving access to affordable health insurance (is) at the top of the membership's agenda," said Jim Brown, Tennessee state director of the national organization.

The group has two bills for lawmakers to look at to help along those lines.

One would give owners of businesses with 25 or fewer workers a franchise and excise tax credit of $400 for each employee who earns $40,000 or less who gets on the company health plan. To get the credit, the business would have to pay at least half of the premium for workers and their dependents.

"What we're trying to do with that bill is to stimulate more small businesses to provide health care coverage," Brown said.

About 45 percent of small businesses offer coverage to workers -- probably less than that in companies with two, three or four employees, he said. Fifteen years ago, the figure was 70 percent.

CoverTN, the program offered by the state, has helped with about 13,000 companies signing up -- about half one-person operations, Brown said.

The tax break would be a good enticement for owners of small businesses to provide health care, said Robert Staub, founder and executive director of the Small Business Chamber in Memphis.

The second leg of NFIB's program is to get lawmakers to create a way for small-business owners to form pools or co-ops to buy insurance as a group.

Business owners could bargain for improved rates and reduce their administrative costs for health coverage, Brown said. It would also help the state by cutting down on the number of uninsured Tennesseans, he said.

"If any organization that had the resources and the ability to bring it together could compete for business, I would support it," Staub said.

Lawmakers at the gathering last week seemed willing to take a look at the proposals.

Rep. Curry Todd, R-Collierville, agrees that small-business owners need ways to get affordable health insurance.

"It makes their employees feel more accepted in their workplace," he said.

Tax credits could help, Todd said. He would consider pools, but wants to see what other states have done along those lines.

Sen. Paul Stanley, R-Germantown, sees the need for helping small businesses cut costs, especially in slow economic times. He said he favored allowing small business associations for health insurance buying.

Rep. Brian Kelsey, R- Germantown, also backed the pool idea as a cost-cutting measure for small businesses.

He also backs another measure he believes will help everyone save money on health insurance -- limiting non-economic damages in lawsuits against health care providers.

"People have not been connecting the dots in the past that suits against health care providers are raising premiums," Kelsey said.

Beyond the NFIB's plans, lawmakers had other ideas for aiding small businesses.

Stanley backs a bill that would toughen penalties for theft of copper and other metals, often taken from construction sites and air conditioning units.

Rep. Joe Towns, D-Memphis, wants to see state government increase the amount of business it does with small enterprises.

"The small guy needs opportunity as well," he said.