New legislation filed on Capitol Hill would help America’s 16 million self-employed
business owners – many who work out of their homes – better afford health insurance
for themselves, their families and their employees.
The Self Employed Health Care Affordability Act of 2003 would allow self-employed business owners who work at home to deduct their health insurance costs when calculating their payroll taxes such as Social Security and Medicare.
Currently, self-employed people are facing rising costs of health care combined with a law that require these business owners to pay an extra 15.3 percent in Medicare and Social Security taxes on their health insurance premiums.
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By allowing self-employed people to reduce their health insurance costs by more than 15 percent, it is estimated that the legislation would give 16 million self-employed Americans better access to affordable health-care coverage.
House Small Business Committee Chairman Don Manzullo (R-Ill.) and Committee Ranking Democrat Member Nydia Velázquez (D-N.Y.) introduced the bipartisan legislation, filed in the House of Representatives as H.R. 1873, on April 30.
In addition to lowering costs, the Manzullo-Velázquez bill makes tax policy fair for the self-employed, according to Manzullo. Corporations are currently able to deduct their health- care expenses from all their taxes.
“Our smallest businesses should have the same opportunity to deduct their health insurance costs as our large corporations currently enjoy,” Manzullo said in a statement.
Manzullo estimates the legislation would cost the government between $1 billion and $2 billion annually. To avoid shortfalls in the Social Security trust fund, the legislation calls for an annual appropriation from general revenues into the Social Security fund to account for the payroll tax deduction.
Approximately 40 million Americans lack health insurance, including one out of 10 Rhode Islanders, according to information provided by U.S. Rep. James Langevin, a Rhode Island Democrat. Meanwhile, the costs of health-care services and prescription drugs are skyrocketing, recruitment of health-care workers is becoming more challenging, and HMO patients are being denied basic rights.
Langevin has been one of the strongest backers of previous versions of the bill.
“The congressman is an ardent supporter of making health insurance more affordable for the self employed,” said Michael Guilfoyle, director of communications for Congressman Langevin. “We haven’t taken a good look at this one yet, but I expect that the congressman will support it enthusiastically.”
A broad coalition of organizations that support self-employed people is also lining up to push lawmakers to enact the bill into law, including Women Impacting Public Policy, a national lobby organization for businesswomen.
“Our 430,000 members continue to tell us that affordable and accessible health care is their number one priority,” said Terry Neese, President of WIPP. Neese said that WIPP supports the bill because 41 million Americans have no health insurance.
In particular, women and minority business owners struggle to provide health insurance for their employees. When their employees are uninsured, most often that means that the employee’s family is uninsured also.
If Congress passes this legislation, along with Association Health Plans,
or AHPs, we will have championed the pathway for health insurance for the deserving
men and women who make up our work force, Neese said.
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