Legislators criticize employer mandate rules

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Lawmakers are pushing back against a provision of ObamaCare's employer mandate that they worry could confuse small businesses.

A test for determining precisely how many workers are on each company’s payroll can be “complex and confusing even for most experts,” according to Rep. Chris Collins (R-N.Y.).

He said at a Small Business Committee hearing on Wednesday that despite the Obama administration’s defense of the healthcare law, “each week seems to bring entrepreneurs more bad news, more costly regulations, more uncertainty and less incentive to grow their business and create jobs.”

Starting in 2015, business with 50 or more full-time workers will either need to offer health insurance or pay a fine.

But for businesses with multiple owners, or owners with multiple businesses, the number of employees on staff can be difficult to calculate. For instance, would two different restaurants owned by the same small group of people be considered as one small business or two? What if they invested a significant amount of money for someone else to start their own business?

The healthcare law requires those companies to use an existing tool found in the Internal Revenue Code, which some businesses use for their retirement plans. But that provision can be hard to decipher, and small firms may need to hire outside professional help to make sure they’re complying with the law.

“Any and all dollars wasted on regulatory burdens such as the business aggregation rule and hiring of tax experts is in fact a dollar that’s not available for growth,” Collins said.

Democrats like Rep. Nydia Velázquez (D-N.Y.) agreed that current rules could be too confusing for small businesses and seemed open to fixing the problem. 

“I remain concerned about how these very complex rules will impact small firms,” she said.

“As with any law of this magnitude, some fixes will need to be made along the way,” she added. “That’s what the legislative process is all about.”

Making matters potentially more difficult for companies, business officials testified, was the fact that many businesses will only have to encounter them for a short period of time, while their staffs hover around 50 workers.

Many firms might not even be aware that they need to use the new calculation to determine how many workers are officially on their books.

“The level of awareness is low,” said Sibyl Bogardus, the chief compliance officer for a Utah-based benefits firm. “For employers that are made up of very small groups, they’ve likely not done this if they’ve not put in a retirement plan.”

Rep. Donald Payne Jr. (D-N.J.) compared the Affordable Care Act to Social Security, which went through a number of revisions when it was first implemented.

“There are issues of the law that need to be tweaked,” he said. “But the bones and the substance of the law are good and are here to stay.”

Velázquez said that it was a “breath of fresh air” to be talking about “fixing” the healthcare law, rather than defending against Republican attempts to repeal it.

“It’s great to know finally that we are moving beyond repealing ObamaCare to finding common ground to making it work, because it is the law of the land,” she said.