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CAPITOL PERSPECTIVES column By J. McManus TREASURY THREATENS SMALL BUSINESSES FOR PROVIDING HEALTH COVERAGE IN THE "WRONG WAY" LIFESCIENCELEADER.COM 12 MARCH 2015 government subsidy. They are caught in the middle. I can't subsidize their health insurance because I risk a $100/ day/employee penalty. Please hurry and do something to help the millions of middle-class, small-business employ- ees who are caught between a rock and a hard place." A homebuilder with 10 employees in Laplace, LA, received a similar notice from the IRS that the coverage he had been providing for his employees would result in a $100 a day penalty per employee. He was forced to drop the coverage and his employees are now paying more than $10,000 a year each to purchase health insurance, and his effort to raise their salaries to compensate for some of the difference increased his business's cost by $5,000 per employee. What is going on here? Why penalize small employers with fines exceeding $36,000 per employee for providing cov- erage through the individual market? One can only speculate that the Obama administration is trying to coerce these small employers into the government-run and still dysfunctional small business "SHOP" exchange or trying to coerce their employees into the state and federal exchanges con- trolled by government. Rather than speculate, Rep. Charles Boustany (R-LA), a senior member on the Ways & Means Committee who has introduced legislation to reverse the Treasury regulation, queried Treasury Secretary Jack Lew at a recent hearing, "Why would Treasury introduce this sort of draconian penalty?" Lew's response: "Via the ACA, we have moved to a system that benefits indi- viduals with affordable healthcare, and we are focused on that goal." How's that for a non-sequitur platitude? Rumors are now swirling that imple- mentation of the regulation may be briefly delayed but not withdrawn. Rep. Boustany's bipartisan legisla- JOHN MCMANUS is president and founder of The McManus Group, a consulting firm spe- cializing in strategic policy and political counsel and advocacy for healthcare clients with issues before Congress and the administration. Prior to founding his firm, McManus served Chairman Bill Thomas as the staff director of the Ways and Means Health Subcommittee, where he led the policy development, negotiations, and drafting of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Before working for Chairman Thomas, McManus worked for Eli Lilly & Company as a senior associate and for the Maryland House of Delegates as a research analyst. He earned his Master of Public Policy from Duke University and Bachelor of Arts from Washington and Lee University. tion that was introduced along with Rep. Mike Thompson (D-CA) has earned the plaudits of the National Federation of Independent Business (NFIB), the National Association for the Self-Employed, the National Association of Homebuilders, and the National Association of Manufacturers and remains the best hope to reverse this ill-thought policy. NFIB under- scored the importance of the bill in its endorsement letter, noting, "Fourteen percent of nonoffering businesses uti- lize a reimbursement arrangement. In a recent NFIB ballot, 78 percent of small business owners support allow- ing employers to contribute pretax funds to their employees in order to purchase insurance on their own." Obamacare's employer mandate applies to large businesses with 50 or more workers. In February, the admin- istration announced that it would once again delay the implementation of the mandate for employers with 50 to 99 employees until 2016 – two years longer than called for under the statute. And companies with more than 100 workers received a grace period if they offered coverage to 70 percent of their employ- ees rather than 95 percent in 2015, as called for in the statute. It is unfortunate that the adminis- tration does not have similar sympa- thy for small businesses that are not even subject to the mandate. They are vulnerable to massive fines that could put them out of business for providing healthcare assistance to their employ- ees in a way that violates the adminis- tration's view of how healthcare should be provided. A little paternalistic and pernicious, don't you think? l of small business owners support contributing pretax funds to their employees to purchase insurance 78% ON THEIR OWN