Shaheen talks health care tax credits with business owners in Portsmouth

PORTSMOUTH - Small business owner Dennis Lunn has struggled to offer his employees affordable health insurance for years with each renewal period bringing drastically increased premiums that result in fewer opting to buy the coverage.

Portsmouth-based Bailey Works owner John Bailey has never been able to offer his three workers health insurance with coverage for them being out of his price-range.

However, the passage of the controversial health care package by Congress may remedy the challenges facing small business owners.

Lunn and Bailey sat down with Jeanne Shaheen at Jumpin' Jay's Fish Cafe on Monday when the U.S. senator rolled into the city to bolster awareness of a component of the health care reform bill that offers a "health care tax credit" aimed at easing the cost for small businesses looking to offer employees health insurance.

Shaheen said recently passed health care reform will immediately seek to ease the financial pressure of small businesses by helping make coverage more affordable.

The landmark bill allows businesses with fewer than 25 workers and average wages of $50,000 or less to be eligible for a tax credit of up to 35 percent to help pay for their employees health insurance premiums.

Both for-profit and not-for-profit organizations are eligible for a credit whose maximum rate will increase to 50 percent in 2014.

Shaheen expressed pride in supporting what she described as a "historic" vote on health care reform and noted that the tax credit aims to remedy what is a huge problem of uninsured working people in the United States.

The senator said 60 percent of the nation's uninsured are made up of small business owners and their employees.

She noted that fewer than 45 percent of small businesses are currently able to offer health insurance to employees

Shaheen said her conversations with New Hampshire small business owners over the recent year have led her to believe many want to offer health insurance to employees, but can't because of high prices.

She said the tax credit will look to help business owners be able to better afford health insurance for workers and provide incentive for those who currently do not.

"It makes good economic sense. We are laying the groundwork for them to grow, expand and help take us out of this recession," Shaheen said of the tax credits.

The Congressional Budget Office estimates the tax credit will save small businesses $40 billion by 2019.

Bailey is the owner of "Bailey Works" - a small high-end bag company.

Bailey said his tiny "cut and sew" workforce is made up of three older women and he has had no chance of offering them coverage with the way the health insurance system currently works.

"It's always been something I wanted to do," Bailey said.

Bailey said he is optimistic the tax credit might help him reach a financial point where he is able to offer health insurance.

Lunn - the owner of Portsmouth-based The Works Bakery - said he does offer health insurance to his small workforce, but noted many in his young staff opt to not take it because of rising costs over which he has no control.

Lunn said his company pays 65 percent of the health insurance with workers being responsible for 35 percent.

He said rates have been increasing 20 percent or more in recent years with this year's projection being 30-40 percent.

Lunn expressed optimism about the tax credit, but said he sees a big problem that he - like many New Hampshire businesses - can only choose from two major health insurance carriers.

The eatery owner said the lack of competition between the two carriers has them raising prices at will as they "share" customers rather than compete for them.

"My whole thing is cost containment," Lunn said.

Lunn noted his employees might make $500 a week and don't want to spend $100 or more on health insurance that is carrying higher and higher premiums, deductibles and co-pays.

Lunn believes the tax credit will be a good start in helping small businesses better afford to offer coverage as federal administrators work out future elements of the health care reform plan Shaheen said will seek to allow businesses to pool together and buy more affordable plans.

Shaheen said the recently passed reform bill will eventually see upward of 95 percent or 32 million more Americans with health coverage.

And while some are lauding the possible benefits of the reform for small business and individuals, others say it will only hamper an already challenged economy.

New Hampshire Republican State Committee Communication Director Ryan William issued a release on Monday that objects to any statements that the reform is good for business.

"Not only does ObamaCare cut Medicare and ration medicine, it also imposes new job-killing taxes that will damage the economy. We've already seen major employers like Caterpillar, and John Deere announce that this fiscally irresponsible law will prevent them from adding jobs and force them to cut health care benefits for their retirees," Williams said.

Williams anticipates the new law will "cripple" New Hampshire ski resorts and other seasonal employers that create jobs for thousands of Granite State residents.

"During these tough economic times the last thing we can afford are the new job-killing taxes that this health care law imposes on New Hampshire businesses," Williams said.