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Election raises hopes for help with health costs, rules

By ASSOCIATED PRESS
Published October 22, 2006

Some of the most frustrating problems facing small-business owners - the ever-rising cost of health coverage, expanding government regulations and uncertainty about taxes - are again concerns as the midterm elections approach. Owners have hopes for change on some of these issues, but they realize that others are likely to remain unresolved, no matter who wins in November.

Many small-business owners say the cost of health care is one of their biggest problems. They want to offer insurance to attract the best workers, but it's becoming more and more expensive.

Businesses have been looking to the federal government for help, but a possible solution known as association health plans, which would allow small businesses to band together across state lines to buy insurance in groups, has continually stalled in Congress. In the meantime, the cost of insurance coverage is soaring.

"It's gone up pretty much by double digits every year and they're finding it harder and harder to get," Dan Danner, executive vice president for public policy with the National Federation of Independent Business, said of small-business owners and insurance. "They don't feel like they have many choices in the marketplace."

Brian Drum, CEO of Drum Associates, a New York executive recruiter, voiced the frustration about health care costs felt by many small-business owners: "It seems like it's out of synch with other things that are inflating."

Business owners are concerned about taxes on several levels - they want to see tax rates cut, but they're concerned about their taxes in the future.

Danner said federal estate tax laws remain an issue with business owners, many of whom want their families to be able to continue owning and running the company after they die.

The laws exempt the first $2-million of an estate, and the top rate is 46 percent; those numbers will continue to decline through 2010, but then, unless Congress acts to extend the law, they will revert to older, higher rates in 2011. If an estate including a family business is valued at above the law's threshold, an owner's heirs could be forced to sell it in order to pay the estate tax.

Danner said he thought Congress would act before then to extend those provisions, but there's no way of knowing at this point how lawmakers might change the law. And with the possibility of more Democrats in the new Congress when it convenes in January, business owners might be even more uneasy; it is the Republican Party that has backed reductions in the estate tax.

"They would like A, for it to be lower and B, to have some certainty," Danner said of business owners and the tax. "They're trying to plan for the future."

[Last modified October 21, 2006, 21:18:23]