Truth #3: Every serious healthcare reform proposal bends over backward to treat small businesses fairly and eliminate the competitive gap.

All credible healthcare reform proposals, including bills now before Congress, contain two benefits designed exclusively for small companies.

"Shared responsibility" relief – Under the shared responsibility concept, most employers would be mandated to make minimum contributions to employee healthcare or else pay a tax. However, the proposals greatly reduce (or eliminate) this tax for the smallest employers.

Under a healthcare reform bill adopted by the House Ways and Means Committee, firms with payrolls greater than $750,000 would be required to either cover employees or pay an 8% shared-responsibility tax. But the tax would scale down to 2% for firms with annual payrolls of $250,000 to $300,000, and it would be eliminated for smaller firms. A competing proposal sponsored by the House Energy and Commerce Committee would exempt from the tax all firms with annual payrolls below $500,000.

Business tax credit – Most proposals include a business tax credit to help small companies narrow the competitive gap. For example, the House Ways and Means Committee bill offers a partial tax credit to firms with fewer than 25 employees and average annual wages of $40,000 or less. A proposal made by the House Republican Study Committee in July of 2009 would provide a one-time $1,500 tax credit to help firms with 50 or fewer employees enroll workers in an employer health plan.

To date, there have been two regional efforts in comprehensive healthcare reform in the U.S. – in Massachusetts and San Francisco – and both plans have helped small businesses narrow the gap. For example, San Francisco's plan requires companies with 100 or more employees to pay at least $1.85 per hour toward employee healthcare, but the requirement drops to $1.23 per hour for companies with 20-99 employees. (Even smaller companies are exempt.) Massachusetts requires companies with 11 or more employees to pay a "fair share" of up to $295 annually per employee. (Smaller companies are exempt.)

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