December 11, 2013
The Honorable Kathleen Sebelius
United States Department of Health and Human Services
200 Independence Avenue S.W.
Washington, D.C. 20201
Dear Secretary Sebelius:
The National Federation of Independent Business (NFIB) is the nation’s leading small business organization, representing over 350,000 small-business owner members in Washington, D.C. and all 50 state capitals. We are writing today with strong concerns regarding implementation of the Patient Protection and Affordable Care Act (PPACA). NFIB is requesting formal multiagency guidance clarifying three recent administrative actions that have increased uncertainty and confusion among small-business owners. Additionally, NFIB is requesting future changes to the law proceed through the formal rulemaking process.
PPACA presents a significant compliance challenge for small-business owners. For example, PPACA dramatically increases the scope of benefits that health insurance products must cover in the individual and small group health insurance markets. Small-business owners must provide new information to employees relating to health insurance coverage options and benefits covered, and must provide additional information to insurers when shopping for health insurance plans.
Despite the increased compliance responsibilities, small-business owners generally believe they are in compliance with PPACA. According to a recent NFIB Research Foundation survey, 69% of small-business owners felt confident they were in compliance with the law’s increased requirements. Unfortunately, small-business owners’ confidence in compliance decreases when significant changes are made to the law. The NFIB Research Foundation survey found that small-business owners surveyed after the employer mandate delay announcement on July 2, 2013 were less confident in compliance than small-business owners surveyed before the announcement. Recent delays and administrative changes will further diminish confidence in compliance.
Three recent changes that will significantly impact small business owners include:
- On Thursday, November 14, 2013, President Obama held a press conference announcing that insurance companies could offer individuals and small businesses the option to renew their current health insurance plans through 2014, subject to approval by state insurance commissioners or other approval entities.
- On Monday, November 25, 2013, the Treasury Department and Internal Revenue Service (IRS) closed the comment period for the notice of proposed rulemaking on Internal Revenue Code (IRC) Section 45R, the Tax Credit for Employee Health Insurance Expenses of Small Employers.
- On Wednesday, November 27, 2013, the Department of Health and Human Services (HHS) announced in a blog post that online enrollment in the Small Business Health Options Program (SHOP) Exchange Marketplaces is delayed for one year.
These significant policy changes are interrelated. The new transition policy to renew current coverage would preclude certain small businesses from access to the small business health insurance tax credit. Beginning next year, the tax credit will only be available to certain small businesses purchasing qualified health plans through the SHOP Exchange Marketplaces. Finally, the one-year delay of online enrollment in the SHOP Exchange Marketplaces makes applying for the small business health insurance tax credit more difficult for small employers.
Only the small business health insurance tax credit proposed regulation was implemented through the formal rulemaking process. The other two decisions were simply announced in a press conference, followed by a brief letter to state health insurance commissioners, and in a blog posting. These announcements prevent detailed explanations of the changes and circumvent public input.
Issuing formal multiagency guidance on the above changes and future changes would more appropriately follow the regulatory process, provide the opportunity for stakeholder and public comments, and more thoroughly explain how each change impacts other aspects of the law. If you have any additional questions, please feel free to contact Kevin Kuhlman at (202) 314-2091.
Senior Vice President
Cc: Gary Cohen, Director, Center for Consumer Information and Insurance Oversight, Centers for Medicare and Medicaid Services (CMS), United States Department of Health and Human Services (HHS)