Federal Issues
Modern cars and light trucks contain advanced technology that monitors or controls virtually every function of the vehicle including: brakes, steering, air bags, fuel delivery, ignition, lubrication, theft prevention, emission controls and in some cases, tire pressure. Car owners and independent shops must have full access to the information and tools necessary to accurately diagnose, repair, or re-program these systems. This information and equipment is necessary to ensure vehicle safety, performance, and environmental compliance. Vehicle manufacturers are making access to such vital information increasingly difficult and costly to obtain for the independent aftermarket and its customers.
Without access to critical information and tools, motorists are forced to patronize new car dealerships, which may not be convenient, accessible or otherwise desirable to the car owner. Moreover, the lack of competition and consumer choice will inevitably lead to higher repair prices. Failure to perform necessary maintenance for any reason will result in unsafe and high-polluting vehicles populating the nation's highways.
The Motor Vehicle Owners' Right to Repair Act prevents vehicle manufacturers and others from unfairly restricting access to the information and tools necessary to accurately diagnose, repair, re-program or install automotive replacement parts. The Act would require the Federal Trade Commission to promulgate and enforce regulations that ensure competition in the vehicle repair business. In addition, the bill would permit the FTC, car owners and independent repair facilities to take legal action to ensure all information and tools are available and affordable. The Right to Repair Act does not affect the dealer's right to perform any services, including warranty work and does not unconstitutionally take the manufacturer's intellectual property or require them to disclose trade secrets.
Click here to send a letter to Congress.
Right to Repair.org.
Click here to see a list of OEM Service Information Web sites.
Healthcare/The Patient Protection and Affordable Care Act (PPACA)
Now that the 1099 Reporting provision in the PPACA has been successfully repealed (great effort on the part of AAIA and membership), there are several other provisions that will have significant impact on small businesses. AAIA belongs to, and is an active participant in, the Small Business Coalition for Affordable Healthcare and the Stop the HIT Coalition (Health Insurance Tax). More information on the coalitions can be found on our Grassroots Activities page.
Grandfathered
Of primary importance to most businesses is the key question of whether or not their current healthcare plan will remain valid. The President was famously quoted as saying “If you like your health plan you can keep it”. There appears to be several areas of concern regarding the ability of a business to stay “grandfathered”. Changes to the amount of copayment or employer contribution rates will be deemed acceptable or cause for the loss of “grandfathered” status based on complicated formulas spelled out in the law. One of the variables in the formulas is the medical inflation rate which will affect the outcome of every calculation. Our coalition has submitted comments to the Department of Health and Human Services in response to its publication of an Interim Final Rule mid-2010. This one may yet play out in the courts (a common refrain).
The Employer Mandate
Scheduled for a January 1, 2014 implementation, the employer-mandate provision assesses a penalty fee of $2,000.00 per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that do not offer coverage and have at least one full time employee who receives a healthcare premium tax credit. Employers with more than 50 employees that do offer health insurance but have at least one full-time employee receiving the premium tax credit will be assessed a penalty fee under a slightly more complicated formula. They will pay the lesser calculation of either $3,000.00 for each employee receiving a tax credit or $2,000.00 for each full time employee, excluding the first 30 employees. The employee premium tax credits are figured on a sliding scale determined by the individual’s or family’s income from133-400% of the Federal Poverty Level and the amount of the credit ranges from 2-9.5% of income.
Fears are widespread in the business community that the mandate will reduce wages and job creation as the cost of the mandate is absorbed, with more problems likely, not the least of which are decreased productivity and higher prices for customers. For those businesses hovering around the 50-employee level, the decision to stay under 50 and slow down growth or expand and face higher costs, will be a difficult one. In the 112th Congress Senator Hatch(R-OR) has introduced S. 20 and Rep. Boustany (R- LA) and Rep. Boren (D-OK) have introduced H.R. 1744 to repeal the mandate. Please visit our Grassroots Activity page to take personal action.
See also the Congressional Research Service Report: Summary of Potential Employer Penalties Under the Patient Protection and Affordable Care Act (PPACA).
The Health Insurance Tax
Labeled a “health insurance fee”, this is actually a direct tax on small business. PPACA assesses a tax on all health insurance companies based on their “net premiums” written. The tax will raise $8 billion starting in 2014 and $14.3 billion in 2018 and later years.
The amount of the tax that the insurance company is responsible for is equal to the percent of the market subject to the tax that the insurance company covers. The larger the insurance company’s market-share, the higher their annual health insurance tax. One thing insurers and economists have agreed upon throughout the healthcare debate: new taxes on insurers inevitably means new costs passed along to customers. The only insurance plans that factor into the equation for purposes of determining the insurance company’s portion of the fees are fully--insured plans—the plans that 87 percent of small business owners purchase.
A recent Congressional Budget Office report confirms that the small business insurance tax “would be largely passed through to consumers in the form of higher premiums for private coverage.” And a recent study by Douglas Holtz-Eakin indicates that the anticipated impact is as much as three percent or nearly $5,000 per family over a decade. It is most troubling that the customers that will pay for these increased costs are the same small business owners who have been asking for health insurance reform that reduces their costs. Please visit our Grassroots page to take personal action.