The long debate over health care reform has ended, leaving many small business owners more confused than ever over what to expect. But they know one thing -- they'll be paying for it for years to come.

The package won't be fully implemented until 2018. However, there are important provisions that will be effective this year, in 2011 and 2012 that entrepreneurs need to begin planning for now. The changes largely involve new taxes, fees and mandates on individuals and small business.

In 2010, a temporary tax credit will be available for a limited number of firms who provide qualified health coverage. However, the credit puts small business owners through a series of complicated tests to determine the amount of the credit. Only firms with 10 employees or less will receive the full credit. For firms with 11-25 employees, the credit is reduced per employee. Firms with more than 25 employees will get no credit at all.

In addition, only firms who pay their workers an average of $25,000 or less are eligible for the full credit. The credit is reduced as the average wage goes up, stopping when it reaches $50,000. Also, only firms that cover 50 percent or more of insurance costs will be eligible. Even if your business is one of the 12 percent that will qualify, the credit is only available for six years.

In the meantime, other provisions that will drive up costs include an assault on one particular industry, a 10 percent tax on indoor tanning services begins July 1.

Beginning in 2011, new changes take effect that will increase costs and limit choices. Those changes include:

* New limits on HSAs and FSAs -- Consumers will be prohibited from using health savings accounts and flexible spending funds to purchase non-prescribed items, including over-the-counter medication (except insulin).

* Federally subsidized long-term care -- Small businesses may voluntarily participate in a new long-term care program. Participating firms' employees will be automatically enrolled and subject to payroll deductions unless they choose to opt out. This program means more paperwork and will almost certainly cost far more than what the deductions will cover.

* A brand-name drug tax -- Manufacturers and importers of brand-name drugs will pay a tax of $2.5 billion in 2011, $3 billion per year for 2012 through 2016, $3.5 billion for 2017, $4.2 billion for 2018, and $2.8 billion for 2019 and thereafter. This tax is certain to be passed along to consumers.

In 2012, small business owners will face a tremendous new burden. They will have to send to the IRS a Form 1099 for each and every business-to-business transaction of $600 or more. We expect that the IRS will hire as many as 12,000 new auditors.

Further out, we'll see new taxes, an expensive, federally mandated minimum benefits package, and additional complex mandates on individuals and employers who will face penalties if they don't comply.

In the meantime, small business owners will struggle trying to gauge the costs and understand the impact of a new law they neither wanted nor asked for, rather than the solutions that would actually help them cope with the rising costs of health care. No doubt when November comes, small business owners will remember who forced this reform on them and cast their vote accordingly at the ballot box.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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The president's health care summit last week may have been great political theater. But what really was accomplished on behalf of the small businesses that desperately need reform?

Small business owners simply aren't interested in political drama or more talking. They want to see less rhetoric and more solutions that produce real results. President Obama's proposal is basically the same as the House and Senate's flawed legislation. We opposed both of those bills because neither addressed the fundament problem: lower overall costs.

To add insult to injury, the president's now promoting even worse ideas that will further threaten the future of small businesses with burdensome new taxes, mandates and fees.

If the White House is serious about reforming health care, then it needs to pursue reforms that help the people that need it the most our nation's small business owners. Otherwise, the summit and its aftermath will only show that small business has simply become a sound bite for reform that provides little relief and increases the cost of doing business.

Small business owners have been constructive and valuable participants in the reform debate. They have worked hard, taking time away from their businesses, to help our leaders understand the struggles they face owning and operating a business. They also continue to urge policymakers to adopt ideas that offer sensible solutions.

For example, the president could give small businesses greater purchasing power to help drive down costs by letting them pool their risks together across state lines to purchase insurance, just like big business and unions do today. Why is that so hard to consider? Or he could support an idea called the optional free choice voucher. This would allow employers to give pre-tax dollars to their workers and let the worker purchase the plan that best fits their needs, like a 401(k) for health care. These two ideas together create choice, portability and puts the consumer in the driver's seat, a win-win for employers and workers.

There are lots of good ideas out there but, sadly, small business owners are left with a bill that's short on savings and big on costs. They're now left asking, "Will Congress and the president stop playing politics and create reform that improves access and affordability, or will they continue down the same path with new taxes, mandates and fees that threaten my ability to run and grow my business?"

It can't be emphasized enough -- in economic times like these, when small businesses are struggling just to survive, policies must be aimed at helping them. No one has a larger stake in this debate. So we must tread lightly and always remind our leaders in Washington to continuously check their ideas by asking one simple question: "Will this help or hurt small business?"

And our leaders also must realize that the old adage of the health care profession applies here as well: First, do no harm. Only then can they address real reform.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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Most policymakers agree that we need an energy policy that creates sustainable economic growth, benefits all Americans and protects the environment. If that's truly the case, they should go back to the drawing board to find alternatives to the burdensome, big-government energy policies currently popular in Washington.

Proposals known as "cap-and-trade," intended to combat global warming and revamp America's energy policy, are deeply unpopular with both the voting public and the entrepreneurs who create most of the nation's new jobs.

Recent polls that my organization released are clear: An overwhelming majority of small business owners oppose cap-and-trade legislation that has passed the House of Representatives. More than 70 percent of the business owners we surveyed think that the legislation will raise energy costs, and similarly large majorities don't buy supporters' claim that it will create new jobs or improve economic growth. And virtually none said that regulating greenhouse gas emissions should rank as a top national priority.

And American voters, who we surveyed separately, agree with them: Most oppose cap and trade, would be more likely to vote against politicians who supported it, and don't believe that control of greenhouse gas emissions is a top national priority. More than 60 percent don't believe job creation claims, and just about as many believe that energy costs would rise. Quite simply, small business owners--who create between 60 and 80 percent of all new jobs--don't want cap and trade and neither do voters.

Given these realities, we hope that the cap-and-trade bill that passed the House will never fly in the Senate or land on the president's desk in anything like its current form. Aside from a few European nations that have adopted such a system (and where it hasn't worked), the system isn't going to catch on elsewhere. It's too expensive, too burdensome and too risky. And do our elected officials have the stomach to impose massive new taxes on an economy that's only beginning to emerge from a major recession?

The public opposition to doing so is evident. Given that many small businesses likely will have to pay more for healthcare and higher taxes in the coming years, the new energy taxes would come at a particularly bad time. As such, no tears should be shed for the death of cap and trade.

All that said, small business owners agree that our nation still needs better policies to address both its energy needs and the possibility of climate change. They also agree that ideas intended to increase the use of renewable energy and the aggressive promotion of nuclear energy deserve further consideration. Other proposals to encourage conservation and increase domestic production of proven energy sources like oil, gas and coal should also have a place in a comprehensive national energy policy.

America needs better energy policies. But a cap-and-trade system would only make our current problems worse. It's time to start over.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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Whether they're young or old, entrepreneurs always have a hunger to come up with the next big idea, or to do something better than anyone else. That's the spirit that lives in each and every small business owner. That's what drives them to create jobs and continue to build our economy.

There are, however, many challenges that new and even well-established businesses face—in particular, the rising cost of healthcare and health insurance. The inability to affect or reduce health insurance premiums from year to year continues to be the greatest challenge for small business owners, along with the lack of competition and choice in the marketplace.

For these reasons, small business should be the focus of the healthcare debate. It's baffling that small business owners need to reiterate why they need reform. They continue to see examples of how big businesses like Safeway and General Mills are doing great things for their workforce, driving down costs, and just want the same. But here's a newsflash: Under current laws and regulations, small businesses can't do it.

So their message is simple: Fix the broken marketplace. For decades, small employers and the self-employed have been forced to bob and weave between the individual and small-group marketplace. These two markets either deny individuals the coverage they need, or they raise rates so high, employers can't afford to keep coverage. Something is wrong with this picture.

The Senate and the House of Representatives have been striving to craft an acceptable healthcare reform bill. As they work, they need to know what's not acceptable to small business owners:

* An employer mandate: Some proposals require employers to offer healthcare to full-time and part-time employees. Research shows an employer mandate could cost 1.6 million jobs, with more than 1 million lost in the small business sector. The greatest effect will be on low-income workers, who will pay through depressed wages and lost jobs.

* A payroll tax: The House would charge a payroll tax of up to 8 percent on all employers with a payroll of $500,000 or more, if they don't provide "qualified" health insurance to their employees. The tax would apply no matter whether the business makes a profit or not.

* A public option: Some bills establish a government-run public option. As advocates for competition and choice, we're deeply concerned that a public option would further compromise the viability of private insurance and eventually would restrict choice to a single plan: the government-run plan.

After 15 years of loudly shouting at Congress about this issue, small business owners should be steaming mad that it's taken this long to get a real discussion going about real reform. Maybe that has something to do with the power and money that comes from the insurance lobby. Maybe now that Congress is seriously engaged, they'll listen to their real constituency, not those who can afford to pad their pockets.

Here's something every voter needs to know: Small business owners need and want reform. To that end, we support market reforms that will increase access to insurance plans and drive more competition and lower costs, not a bunch of new taxes and confusing rhetoric. That's the only way we'll get more Americans covered at lower costs.

Americans in general, and small business owners in particular, should contact their representatives and urge them to pass the reforms that truly help small businesses and their employees

You can follow the latest news and information about the debates here.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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As Labor Day approaches, marking the unofficial end of summer, many Americans are grabbing their last chances at a variety of activities: neighborhood cookouts, family outings, lounging by a pool or taking a last few days of vacation.

There's one other thing that all Americans, especially small business owners, should grab a last chance to do. They should contact their lawmakers in person before they go back to Washington after the holiday.

Special-interest groups have grabbed many headlines by spending huge sums of money on ads aimed at influencing legislators. But that's no substitute for hearing directly from voters. For lawmakers, talking to real people about their everyday concerns is a much more effective way to gauge what's on their constituents' minds than any slickly produced ad campaign.

For the next few days, representatives and senators will be out and about in cities and towns around the country. They'll be shaking hands, visiting coffee shops and community centers. You'll see them marching in Labor Day weekend parades, waving and carrying flags, all to tell you how much they care about you, your community and our country.

So take advantage of the opportunity to tell them exactly what's on your mind and what's important to you and your business. Let them know what you expect of them when they go back to the Capitol.

A funny thing sometimes happens to our representatives when they get inside the Washington Beltway bubble. They can too easily get caught up a petty politics, insider bickering and frantic races to one fundraiser after another as they think about their next campaign. The kindly, community-oriented Dr. Jekyll can become a self-centered Mr. Hyde, forgetting who he is, who he represents, and who, in the end, he works for -- you.

They need to be reminded of that fact whenever possible, with the strongest possible messages. As a small business owner, you have a particularly powerful message to deliver. You're a leader in your community. You create jobs, pay wages and taxes to all levels of government. You are the largest single sector of our economy, both local and national.

And right now, many small business owners are struggling. If you're one of them, let your legislator know. Be sure they hear that you can't afford to be hit with an expensive new mandate to provide health insurance. Help them to understand that the proposed energy bill, with its risky new cap-and-trade program, will mean much higher costs for your business, stifling growth and investment. Let them know that your taxes need to be kept low so that you can grow your business. Talk to them about whatever is threatening the well-being of your business.

Now is your chance to speak up. Don't let it pass you by. Otherwise, they're liable to forget that you're the boss.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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House Speaker Nancy Pelosi and others in Congress have been talking a lot about how a government-run public option will lead to lower costs and more choices for health insurance. Nothing could be further from the truth. Instead, the reality is that a "public option" would restrict "choice" to a single plan: the government-run plan.

But what it's really intended to do, according to prominent leaders like U.S. Rep. Barney Frank of Massachusetts, is to put us on the road to single-payer, government-run healthcare. On a YouTube video that's making the rounds, he says, "If we get a good public option, it could lead to single-payer [healthcare] and I think that's the best way to reach single payer."

Sure enough, the House bill has elements that are deliberately designed to drive small business owners out of the private market and into the public option. For example, the bill includes a provision that would require employers above a certain revenue threshold to offer a health insurance plan, whether they can afford to or not.

If they don't, they're forced to pay a tax of up to 8 percent of their total payroll. No matter how profitable or unprofitable a business might be, the owners are forced to pay this tax if they do not provide "qualified" health insurance to their employees.

The bill also establishes a confusing test that hits employers who already offer health insurance. Small businesses must, one, offer that qualified plan (determined by a government-appointed board); two, provide both individual and family coverage; and three, meet minimum contribution levels, which could be more than they are already paying, let alone can afford.

And if employees decline coverage and decide to go to the government-run option, the employer must also pay the payroll tax. All of these added expenses and new rules are likely to lead small business owners to throw up their hands and say it's cheaper to drop their plan and pay the tax.

As you can imagine, these ideas scare and outrage many small business owners, and rightly so. One owner told us, "How do I add expenses to my company when I've already lost $100,000 this year and am just desperately trying to survive? We lost one-third of our employees and the remaining ones are working reduced hours."

Another member wrote in, "Mandates are ineffective [and] this bill deprives me of my rights to determine how to use my resources. It harms small business and their employees--the very groups it is supposed to help."

The House bill simply will not work for small businesses. Small business owners, their employees and families are in dire need of health insurance reforms that will lower costs, increase competition and result in more choices for private health insurance.

That's why thousands of small business owner across the country are contacting their legislators while they are back home in August. Their message? If the president and Congress insist on going down the House's road, they will actually make things worse for small business. Anyone who values the contributions small businesses make to their communities and to the country should tell their representatives the same thing.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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Get ready to pay a whole lot more to keep the lights on.

Congress currently is working to pass a huge energy bill. The centerpiece is a system to force energy utilities to purchase government credits to offset their greenhouse gas emissions. This would in effect be an energy tax on the American people as the utilities pass the increased costs along to consumers and small business owners.

The plan is called "cap and trade" and it refers to a new trading market that Congress wants to create. The government will set limits on the amount of greenhouse gases businesses are allowed to emit (the "cap"), and then businesses will purchase credits to offset their emissions.

Businesses that reduce their emissions below the cap will be free to sell their credits to other businesses (the "trade"), a system with the potential to make trading mortgage derivatives look like a good idea.

However, in the initial phases, more than 80 percent of the credits will be given away by the government, rather than auctioned off as originally planned. The credits will go to big businesses hand-picked to garner enough support to pass the bill out of the House Committee on Energy and Commerce.

Even President Obama admits current cap and trade proposals will cause energy rates to rise. "Under my plan of a cap and trade system, electricity rates would necessarily skyrocket," he told The San Francisco Chronicle last year. At the same time, the House Committee on Ways and Means estimated we would lose anywhere from 1.8 million to 5.3 million jobs.

That's because big businesses will pass the cost on to small businesses and consumers in the form of higher prices. An analysis by the Massachusetts Institute of Technology of a less-restrictive bill in the last Congress estimated electricity rates would go up at least 40 percent.

And that would be devastating to small businesses. Consider the stories we've already heard:

* A trucking company owner in Ohio spends more than $4 million a year on his energy bills. If his costs increase 40 percent, he'll be spending $5.6 million a year just on electricity and fuel. In order to absorb the new energy costs, he said he would have to raise his prices, as well as cut hours and employees.

* A marketing and exhibit company annually spends about $120,000 on energy costs, seeing no decrease despite investing in a $40,000 "smart technology" heating-ventilating-air conditioning system. This company wants to open a second location in Illinois, but the owner says with expected cost increases, including healthcare, property insurance and legal counsel, it may be impossible to expand.

* The Pennsylvania owner of four athletic clubs spends about $600,000 a year to power the heating-ventilating-air conditioning systems and lighting the facilities. If that cost goes up 40 percent to $840,000, he says his only choice will be to close his business.

Everyone wants cleaner air and a better environment. But we all need to do our part to help. Putting the burden on those who can least afford it is not the way to go.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.

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