NSBA Applauds Recent Effort to Achieve True Health Care Parity for Small Businesses

FOR IMMEDIATE RELEASE

Contact:
Rob Yunich
Director of Communications
202-293-8830 x224

Washington, D.C. — The National Small Business Association (NSBA) applauds the reintroduction of the "Equity for Our Nation's Self-Employed Act of 2005" (S.663) by Sens. Jeff Bingaman (D-N.M.), Craig Thomas (R-Wyo.), and Johnny Isakson (R-Ga.). S.663 would allow the self-employed to fully deduct their health insurance premiums for the purposes of their income tax and self-employment tax (also known as the FICA tax).

"We applaud the re-introduction of this act. It will help end an injustice that has been in place for far too long," NSBA President Todd McCracken said. "Even though the self-employed gained the ability to deduct the cost of health care against income tax in 2003, they are still being forced to pay payroll tax on the income used to purchase the health care. We hope that S.663 passes, putting small businesses on equal footing with large businesses once and for all."

Even with the progress made two years ago, small businesses still are at a disadvantage. The 2003 legislation only addressed the deductibility of health insurance premiums as it related to income tax. The self-employed health insurance deduction still is not considered an ordinary and necessary business expense for the self-employed, as it is for the corporate entity. Therefore, the premiums are still subject to self-employment tax.

The additional 15.3 percent tax paid by small businesses makes already impossibly-priced healthcare practically obscene by typically adding thousands of dollars to the cost of an individual’s health care.

Since 1937, NSBA has been an advocate for the interests of small businesses throughout the country, reaching more than 150,000 small businesses today. NSBA is proud to be the first national small business advocacy organization in the United States.