President Obama gave a speech Thursday directed towards small business owners, calling them “the engine of job growth in America.” In his continuing efforts to get the nation behind his health care initiative, Obama addressed not only small business owners and organizations from across the country but also members of the U.S. Chamber of Commerce and the National Federation of Independent Business.
After months of criticism directed towards the White House for ignoring the needs of small businesses, the President has begun to address this issue. Prior to the speech, the President had announced new incentives and assistance aimed at easing lending to small businesses, including higher caps on loans guaranteed by the Small Business Administration (SBA).
Many small business owners have stopped offering health care to their employees, and may even have canceled their own insurance in an effort to save money. Employees who have health insurance in their current jobs may be reluctant to strike out on their own and open a small business because health care premiums are prohibitive.
The President’s proposal includes numerous benefits for small businesses that already have health care employee benefits in place. For those businesses that currently are not offering benefits, the President is proposing forming an “exchange” to pool small businesses together for greater bargaining power with the insurance companies.
The bad news is that businesses of a certain size will be required to contribute to the costs if they choose not to offer coverage to their employees.
I expect there to be much criticism of the mandate to penalize businesses that do not provide health care insurance for their employees, however, companies with payrolls under $500,000 (income after business expenses) would be exempt from the requirements.
So, what do you think? Will the President’s proposal help small businesses succeed, or are you still feeling like the little engine chugging up the hill on your own with no help?