The Illinois Chamber of Commerce firmly believes the health care legislation the U.S. House of Representatives passed Saturday detracts from reform.

Laura Minzer, executive director of the Healthcare Council for the Illinois Chamber, said small businesses would be crippled if those businesses were forced to provide health care for full-time and part-time employees.

The House legislation, which passed 220-215 and now sits in the Senate, has the makings of the first large-scale health care reform since former President Lyndon Johnson was able to institute Medicare and Medicaid in the 1960s.

The legislation includes an employee mandate and a payroll penalty tax on businesses along with providing a public option for the uninsured.

“This legislation may get more people covered,” Minzer said. “But not in a responsible or sustainable manner.”

She said the taxes and spending associated with the legislation would amount to $6 million in new costs for small businesses.

According to Coles Together, 64 and 34 percent of Charleston’s labor force is non-manufacturing and manufacturing, respectively. Both categories would include small businesses.

Minzer said that, if the House legislation remains intact, small businesses would have to adjust revenues to compete with escalating costs.

“It’s a concern in the long run on how you can support these new mandates,” she said.

Minzer said increased costs would result in fewer jobs for a sector that “makes up the backbone of the economy.”

The legislation calls for $1 trillion in new spending over the next 10 years. The Congressional Budget Office predicts the legislation would also reduce the federal deficit by $100 billion in that time span along with provide health care for 96 percent of the population.

A payroll penalty tax would also be applied to employers with a payroll of more than $500,000 who do not offer qualified health care insurance.

Minzer said businesses that hover around the $500,000 mark would be inclined to reduce spending, cut jobs and avoid the tax.

She said the legislation also includes a surtax, which is intended to tax individuals who make more than $500,000. Certain small businesses prefer to file as an individual as opposed to a corporation – making them subject to the surtax, Minzer said.

According to the National Federation of Independent Businesses, 75 percent of small businesses are classified as an individual.

“You’ll see an impact on all levels,” Minzer said.

Mark Esarey, who serves on the executive committee for the Charleston Chamber of Commerce, said any increased costs that affect profits of small businesses would challenge the businesses’ ability to succeed.

He said loss of profit could result in job cuts or something even worse.

“If there is not sufficient profits for a business, they may have to close eventually,” Esarey said.

He said the House legislation would affect individual small businesses differently.

He said it is difficult to predict how severe that effect would be because the health care debate has provoked many different ideas throughout the past year.

“I’m yet to see the same group of details twice,” Esarey said.

He said any health care reform has the potential to increase challenges for small businesses, adding debate is still ongoing.

During the course of that debate, employee mandates could include exemptions that aim to help the majority of small businesses, Esarey said.

“We’ll see,” he said.

Stephen Di Benedetto can be reached at 581-7942 or sdibenedetto@eiu.edu.