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By: Mark Lee The U.S. Tax Code is a 74,000 page maze of sections, clauses, deductions and exemptions. Small business owners certainly do not have the time to learn every twist and turn, clause and section in the Code. Not only do entrepreneurs have to keep their doors open, take care of their employees, and keep on the right side of state and local regulations, but they must also submit detailed filings to the IRS that vary across the spectrum of the small business ecosystem. So, what should be done to streamline the Code and lessen the burden on our nation’s small business community? The House Small Business Committee (HSBC) held an appropriately titled hearing, “Start-ups Stalling? The Tax Code as a Barrier to Entrepreneurship,” to begin to tackle this issue. The HSBC is one of the more bipartisan committees in the House, so it was no surprise that both Chair Steve Chabot of Ohio and Ranking Member of Nydia Velazquez of New York were in general agreement that the tax code is desperately in need of reform and simplification. The hearing was convened at a time when Speaker of the House Paul Ryan was busy whipping up support for a comprehensive federal tax code overhaul--- one not seen since the Reagan Administration. Ranking Member Velazquez made it clear that small businesses must be at the forefront of any tax overhaul. Since pass-throughs, S-corps and LLCs are all subject to different tax regimes, Rep. Velazquez mentioned, simple business formation is one of the first complicated tax hurdles that an entrepreneur has to clear. Additionally, startups and small businesses are often operating in the red or on very slim revenue margins to where an unexpected hurdle could potentially be ruinous. Chair Chabot asked the panel about the cost of compliance and the fear of audits. As we all know, the majority of small businesses do their taxes in-house and cannot afford accountants and tax attorneys. The panel unanimously agreed that this was amongst the most pressing tax burden they face. Witness Tim Reynolds, President of Tribune, Inc. of Hudson, Ohio and testifying on behalf of the National Small Business Association, recounted his own recent audit costs. His small firm paid thousands of dollars in compliance costs alone: a number that doesn’t account for the lost business and revenue that resulted from the audit process. Other witnesses included Mr. Kyle Pomerleau, Director of Federal Projects at the Tax Foundation; Troy Lewis, CPA, CGMA, the Tax Executive Committee Immediate Past Chair of the American Institute of CPAs, and David Burton, Senior Fellow of Economic Policy at the Institute for Economic Freedom and Opportunity at the Heritage Foundation. In an already wild start to a new Administration and Congress, tax reform remains near the top of both of their agendas. Small businesses everywhere are rightfully screaming for relief. We need to stay on top of advocating for tax reform that is a less burdensome regulatory regime for our nation’s vital job creators.

By Jennifer White What is the number one thing small business owners want Congress to focus on this year? Is a lack of political certainty affecting America’s business environment? What can be done to better help women and minorities obtain capital to start their businesses? These are the questions the House Small Business Subcommittee on Economic Growth, Tax, and Capital Access discussed during a hearing entitled “State of the Small Business Economy,” giving the committee the opportunity to listen to testimony on concerns confronting small business owners in 2017. To no surprise, the committee heard that the most taxing issues to small business right now are healthcare deficiencies, tax reform, and regulatory reform, and Chairman Bland posed the question, “In addressing these issues, where should we spend the most time?” Holly Wade, Director of Research and Policy Analysis for the National Federation of Independent Business (NFIB), said you can’t pick just one. According to NFIB’s 2016 Small Business Problems and Priorities Survey, health insurance is the number one issue plaguing small business, directly followed by burdensome regulations and federal taxes. The small business economy, she said, has struggled to bounce back from the recession due to taxes, regulations, and health insurance, which consume valuable resources of small businesses, including time and profits. To restore the small business economy, all three of these issues must take priority. Another common denominator heard in each witness’ testimony was concern over lack of policy and regulatory certainty regarding the business environment. Steve Veuger, Resident Scholar of the American Enterprise Institute, said that despite measures such as passage of the Small Business Regulatory Flexibility Improvements Act, requiring more careful consideration on rules and regulations and how they affect small business, measures of uncertainty have spiked in the last few months. Mr. Veuger also pointed out that congress must be careful in the repeal and replacement of the ACA – to move forward without a clear direction of policy, he said, could cause individual and small group markets to unravel in a detrimental way. Members of the subcommittee also asked questions about the difficulty that women and minorities still face in regard to obtaining jobs and accessing capital. According to Victor Hwang, Vice President of Entrepreneurship for the Ewing Marion Kauffman Foundation, an important part of that issue is that while the U.S. is increasingly becoming more racially diverse, the American entrepreneurial population does not reflect it. Today, 80.2 percent of American entrepreneurs are white and 64.5 percent are male. Mr. Hwang said that this gap for racial minorities and women is costing the country millions of jobs and that the key piece to increasing diversity in entrepreneurship is by overcoming social barriers, such as lack of a formal degree, race, or gender, that can often prevent individuals from turning an idea into a business reality. Further, Bob Bland, CEO and Founder of Manufacture New York, and the co-chair of the Women’s March on Washington, relayed her own struggles of accessing capital because of past credit. Even with great programs it can still be difficult for women to get loans, she said, because they still don’t qualify for low interest rates, and need something that provides for more risk like venture capital, which can be even harder to obtain. Mr. Hwang agreed that venture capital is not on a level playing field. He suggested that building more opportunities for connections at a local level based on trust would be a very core way of getting obtaining capital to a level playing field. “Being an entrepreneur is hard and there are risks associated – it’s the spirit of being able to take a loss that makes America great – what can we do to spread the risk so that everyone everywhere has the opportunity to be one?” asked Rep. Kelly as the final question of the hearing. We educate people on how to find jobs, not how to make jobs, answered Mr. Hwang. To understand the access issues entrepreneurs face, we have to focus on the people who are starting at the bottom with nothing.

By Ann Sullivan Earlier this month, WIPP submitted comments on a proposed rule changing the rules related to small business participation on multiple award contracts, also known as MACs. The FAR Council, which oversees federal acquisition regulations, sought to clarify the use of set-asides, reserves, and orders placed against MACs. As contactors already know, use of these large contracts is steadily growing. Ensuring all socioeconomic groups, including WOSB’s have access to these opportunities, is a top priority for WIPP. The rule adds coverage for the new concept of a “reserve.” A reserve would be used on MACs where a partial set-aside is not feasible, but where agencies still want small businesses to participate as prime contractors. This “reserve” concept is very similar to the tracks outlined in WIPP’s Do Not Enter report, which shows how agencies have utilized certain socio-economic set-asides, and discriminated against women-owned firms. While the proposal provides clarity for contracting officers, it falls short by including an out-of-date policy regarding the limitations on subcontracting. In May 2016, SBA finalized a rule change that substantially revised the limitations on subcontracting by making it easier for women-owned firms to comply. The new rule focuses on the percentage of the award amount that has been subcontracted, not the percentage of work. The rule also provides an exemption for similarly situated entities, so WOSBs subcontracting to other WOSBs does not count against the percentage of the award subcontracted. This new policy is a win-win for small businesses, but the FAR Council does not acknowledge the new policy in its rule. If one of the purposes of the rule is to clarify small business authorities for contracting officers, the FAR should use the most up-to-date performance of work requirements. WIPP appreciates the interest of the FAR Council in providing greater flexibility and clarity for the role of small businesses in multiple award contracts. But this proposed rule does not do enough. Without additional small business protections, this rule could hurt our nation’s biggest job creators- small businesses.

By: John Stanford, WIPP Government Relations The Department of Labor and FAR Council issued final regulations that require federal contractors to disclose labor violations from the past three years. This blog updates an earlier edition with what you need to know. For more details or if this impacts your business, I encourage you to read official guidance here. Ahhhh, Labor Day. The unofficial end of summer. A century-old government-granted day off to squeeze in another day at the pool, buy the last of the school supplies (who really needs a protractor anyway?), see the grandparents, and now – for federal contractors – an opportunity to review your company’s legal history. It doesn’t sound quite right, does it? But for thousands of federal contractors, that is exactly what newly finalized regulations mean. I will get into to the details and timeline of the new requirement in a moment, but first, a little history on a change WIPP has watched closely. In 2014, President Obama issued an Executive Order with the goal of barring bad companies from winning federal contracts. The following summer the Labor Department (DOL) and the FAR Council (overseers of contracting rulebook, “the FAR”) proposed how this could be achieved. Last week, final rules were published – and contractors nationwide let out a collective groan. You see, excluding companies with a history of bad acts from winning government work – a generally universally accepted idea – is not easy. WIPP said just that in our formal comment last year. We agreed that companies that follow the rules should not have to compete against companies that break them for federal contracts. But the proposed system would place burdens on women-owned contractors and dump paperwork requirements on contracting officers. Our comment, along with hundreds from individual business owners and other trade groups, did little to sway the government from moving forward. The new requirement detailed below goes into effect on October 25, 2016. The regulation requires federal contractors and subcontractors to disclose violations of 14 federal labor laws and the equivalent state laws from the previous three years. Exemptions were provided for companies with contracts valued less than $500,000. Prospective federal contractors will need to declare if they had labor violations in the previous three years when submitting an offer. During an initial evaluation, contracting officers will see that declaration (a simple “yes” or “no”), without any additional detail or explanation. Later, if a contractor were likely to win an award, the contracting officer would have to decide if the contractor is a responsible company (a requirement of all government contracts already). It is in this phase that details like appeals, remediation, or mitigating factors could be explained. Contracting officers will attempt to identify companies with “serious”, “willful”, “repeated”, and/or “pervasive” violations and not award them contracts. Companies with minor violations could still be considered responsible and win contracts. In what the government views as a compromise since their initial proposal, the system will be phased-in over the next two years. The DOL released the following timeline: Phased-In Implementation Schedule · Week of September 12, 2016: Preassessment begins, through which current or prospective contractors may come to DOL for a voluntary assessment of their labor compliance history, in anticipation of bids on future contracts but independent of any specific acquisition. · October 25, 2016: The final rule takes effect. Mandatory disclosure and assessment of labor law compliance begins for all prime contractors under consideration for contracts with a total value greater than or equal to $50 million. The reporting disclosure period is initially limited to one (1) year and will gradually increase to three (3) years by October 25, 2018. · January 1, 2017: The Paycheck Transparency clause takes effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers. · April 25, 2017: The total contract value threshold for prime contracts requiring disclosure and assessment of labor law compliance is reduced to $500,000. · October 25, 2017: Mandatory assessment begins for all subcontractors under consideration for subcontracts with a total value greater than or equal to $500,000. Needless to say, our concerns remain. And before I go into a few of them, I would point out that the $50 million threshold sounds like a lot. It includes, however, companies on a multiple award contract with a ceiling amount above $50 million. Meaning a company that wins a BPA or IDIQ valued above $50 million, though not necessarily the amount of work the company will actually perform, will face the October 2016 deadline. On a broader level, the rule simply is not ready for primetime. The Labor Department and FAR Council chose not to include what state labor law violations must be reported. It is impossible to gauge the impact of a regulation when missing significant portions. What is in the rule, however, is equally concerning. In some cases, violations that require reporting will not be be fully adjudicated. That is, companies would have to report decisions against them that may ultimately be overturned – as nearly a third of NLRB decisions have been. This is compounded by WIPP’s worry that simply having violations on record will “blacklist” companies without providing any opportunity to offer explanation. With limited resources and time, contracting officers may elect to avoid companies with any disclosed violations, despite the intent of the order to only bar violations of a certain severity. Burdens on subcontractors are also being created. They must report violation history as well – directly to DOL. This was a notable change in the final rule, by making the subcontractor and the Labor Department engage each other, and not put the responsibility on the prime contractor. At the same time the government has admitted it lacks the resources to answer all questions about weighing different labor violations from hundreds of thousands of subcontractors. Ultimately, this change could be the most damning, as many of these companies are unaware of the new requirements because they never sought business with the government in the first place. Finally, the Fair Pay and Safe Workplaces requirement is one of many in a disconcerting trend of new regulations that specifically target federal contractors. Earlier this year, regulations raised the minimum wage solely for workers on federal contracts. New requirements regarding sick leave were also released. These make contracting with the federal government more onerous, particularly for women entrepreneurs seeking to enter the market. At a time when we want more competition and innovation in government, policies impacting only federal contractors put up barriers for entry. Without question, WIPP supports efforts by the federal government to rid the contracting environment of businesses with a history of abusive and neglectful violations. In doing so, the government levels the playing field for the millions of businesses playing by the rules. But the government already has those tools and this rule will not achieve this goal. Instead, it will be harder to be a contractor, pushing the innovative products and services of women-owned businesses out of the federal market. So to the federal contractors out there gearing up for a warm holiday weekend, fire up those grills, wear that final white outfit, and head into the office – it’s going to be a busy day. John Stanford is part of WIPP's Government Relations team in Washington, D.C., specializing in federal procurement and healthcare policy. When not bothering lawmakers about needed changes, he can be found in the woods at local golf courses.

By: Debbie Kobrin, WIPP Government Relations With the party conventions right around the corner, and a few months to a new President, you might think the current administration would be slowing down. But things are moving in the opposite direction. The Administration is churning out plenty of new contracting rules, and shows no signs of stopping anytime. In June, SBA finalized a new subcontracting rule which will help WOSBs with subcontracting requirements, by easing the “50 percent rule” to allow a WOSB to do less than 50 percent of the work on a contract, as long as the WOSB subcontracts to other WOSBs. The rule also shifts the limitations on subcontracting from requiring a prime to perform at least 50 percent of the labor on the contract, to requiring a prime perform at least 50 percent of the dollar amount of the contract. The rule also contains changes to subcontracting plans, roles for Procurement Center Representatives (PCR), Joint Ventures and more. Also last month, the GSA finalized a new regulation requiring contractors to report transaction or task order level data on goods and services to GSA. Under the transactional data rule, businesses are required to tell GSA what federal agencies purchase through GSA. This rule applies to GSA contracts including the Federal Supply Schedule (FSS) and Government-wide Acquisition Contracts (GWAC). Last week, the FAR Council finalized a rule strengthening subcontracting regulations by finalizing the “ list us, use us” requiring for prime contractors to make a good faith effort to utilize small subcontractors to the same degree as listed in the bid or proposal. WIPP has supported this change for a number of years, and testified on its value to women business owners. The rule also requires prime contractors to assign NAICS codes to subcontracts, and restricts prime contractors from prohibiting a subcontractor from discussing payment issues with the contracting officer. In addition to what we have seen over the past several months, SBA is expected to release a new Mentor-Protégé Program for all-small-businesses any day now. The SBA is also expected to work on rules associated with lower-tier subcontracting credit, WOSB certification, and the WBC program. The FAR Council continues to work through its back-log and plans to release new rules that include creating a government-wide definition for consolidation and bundling, providing subcontractors with additional payment protections, and implementing the Department of Labor Fair Pay, Safe Workplaces Executive Order. As we enter the home stretch of the Obama Administration, there is a clear impetus to do as much as possible over the next several months. As new information about rules becomes available, WIPP is committed to keeping you informed.

By: Aaron Richards, Intern “Millennials are on track to be the least entrepreneurial generation in recent history,” Dane Stangler, the Vice President of the Kauffman Foundation testified last week to the U.S. Senate. Stangler pointed out that the decline in entrepreneurship represents a national crisis requiring immediate attention from policy makers. As a millennial myself, I find this to be alarming. The Small Business Administration reported that in 2015, less than 2 percent of millennials reported self-employment, compared with 7.6 percent for Generation X (born 1963 to 1981). Moreover, over the past 20 years, the United States has experienced a steady decline in business startups. Trends suggest that entrepreneurship amongst millennials will remain low for decades. American entrepreneurship is a comprised of a multi-dimensional group of people. Americans of various socioeconomic backgrounds start companies in different industries in different parts of the country. This “startup deficit” has contributed to the sluggish employment recovery after the recession. A lower level of business creation has also dragged down the overall fluidity of the U.S. economy. While American entrepreneurship has slowed, there are steps that lawmakers can take to remedy the decline. To rectify the headwinds and renew entrepreneurial growth in this country, Mr. Stangler suggest lawmakers address the following steps: (1) Scrutinize existing programs: There are 45 different federal government programs that aim to help entrepreneurs. Congress and administrative agencies should devote resources to understanding their effectiveness and where cuts might be possible. Lowering costs of entrepreneurial experimentation promises to foster more entrepreneurship than another government program. (2) Reduce regulatory complexity: This would not only help entrepreneurs but American firms. While there are already special regulatory provisions that apply to small businesses, Congress should consider revisiting regulations that may have reduced the volume of lending to young people attempting to start firms. (3) Invest in data collect: The best way to monitor the health of American entrepreneurship is through data. Additional resources should be considered to augment and expand these efforts. Entrepreneurship is vital to the American economy and democracy. At AEO, we believe America’s best entrepreneurial days are still to come. In our Linking Young Adults To Microbusiness report, we provide new pathways to economic opportunity to the youth by exploring all available options. This vision however will not become reality without the help and support of public policy. An economy that thrives from millennial entrepreneurship is a dream worth propelling.

By: Jake Clabaugh, WIPP Government Relations Is the federal regulatory process stacked against entrepreneurs? The Joint Economic Committee sought to answer this question during a hearing entitled “Encouraging Entrepreneurship: Building Business, Not Bureaucracy.” The Committee’s Vice-Chair, Pat Tiberi (R-OH) opened the hearing with this direct question to witnesses: Is the thicket of government bureaucracy strangling private initiative? Before taking on the Vice-Chair’s question, the witnesses began by framing the landscape. Entrepreneurship – the birth of new firms – has been trending downward since President Jimmy Carter’s Administration in the 1970’s. Dr. Tim Kane, a Research Fellow at Stanford University’s Hoover Institution, highlighted the decline in the number of startup firms from 16% of total firms in the U.S. in 1977 to just 8% today. Despite the decline in overall start-ups, National Women’s Business Council (NWBC) Chair Carla Harris lauded the growth in women-owned businesses. Since 2002, the number of women-owned firms has leaped from 6.5 million to 10 million. Women are creating businesses at 2 -1/2 times the national average. The progress made by women business owners provided a bright spot in otherwise gloomy testimony on the outlook for entrepreneurs. When the witnesses were asked what regulations were causing the most headaches, the Affordable Care Act (ACA) was the most commonly cited culprit. Specifically, the ACA defines a full-time employee as an individual working thirty hours a week instead of the traditional forty. This definition determines whether a business is exempt from the employer mandate. The witnesses echoed the experiences of many WIPP members who have found the thirty-hour workweek definition detrimental. To tackle this and other regulatory challenges, WIPP partnered with the National Association of Manufacturers, Small Business & Entrepreneurship Council and International Franchise Association to launch Rethink Red Tape. As part of this initiative, WIPP will be calling on policymakers to produce better, fairer rules. In the opinion of the Joint Economic Committee and WIPP Members alike, regulatory reform will be a win for entrepreneurship.

By: Ann Sullivan, WIPP's Chief Advocate Recently, my family attended a Nationals game that just happened to be the night the Nats honor the US Army. A general threw out the first pitch, the Army Secretary handed the ball to the pitcher and the whole stadium stood in silence to hear the Army Singing Sergeants sing the “Star Spangled Banner” and watch the presentation of the Colors. Soldiers in crisp military dress lined the field in rows straighter than mere mortals could ever replicate. This show of patriotism never gets old. It serves to remind us of the respect we have for our country and those who defend it. But there is a different kind of patriotism that, while not as showy, happens in business meetings and dinner tables. Take for example, the session at the WBENC conference in Orlando a few weeks ago sponsored by WIPP/WE Decide 2016. For an hour and a half, we went over the Presidential and Congressional elections. We talked about what candidates were or were not saying and how the business community has been largely left on the sidelines. The participants in the room did not know each other but started coming up with ideas on how to change party rules, gerrymandered Districts and making a difference in upcoming elections. Yes, we talked about politics without getting snarky. Long after I finished presenting, groups of people around tables kept the discussion going. That’s patriotism. Polls suggest that politics is “off the table” right now. The Presidential election survey data show that the majority of voters in the Republican Party choose “someone else” instead of their presumptive nominee. And the one segment (those that held no degrees) that selected Trump did so with the slightest of margins. On the Democratic side, the news isn’t much better. According to Public Policy Polling, Clinton's favorability is 39/54, and Trump is even worse off at 35/58. Congressional candidates don’t fare much better. As of June, 80% of the voters surveyed by Gallop disapprove of the job Congress is doing, but yet a very high percentage of incumbents will return to Congress. That means to me that voter apathy has put discussion of policies and politics “off the table.” The definition of patriotism is “love or devotion to one’s country.” That’s what the room of people at the WBENC session were expressing while talking about change. Sure waving a flag can denote love for the USA, but so does engaging in the political process. It can be as simple as casting a vote or canvassing for the candidate you support. It can mean being a delegate to the Democratic or Republican national convention or looking into your state’s decision-making, which determines the electoral map. An interesting resource in figuring that one out is run by a professor at Loyola Law School – “All About Redistricting—Who Draws the Lines”. Promoting change is patriotic. So, why don’t we get back to discussing economic issues with our friends, family and colleagues? Discussions centered on solving problems in our country should be on the table. The easy way out is to complain, declare our dissatisfaction and opt out of the democratic process upon which our country was founded. Elected officials have been eager to feed into that pessimism by declaring that Washington is broken, even when they are in a position to fix it. I was struck by a scene described in the Washington Post about the Fourth of July celebration on the National Mall in Washington: Richard Palmer stood outside the White House and forgot for a moment the sense of foreboding he said he has felt about his country as the contentious 2016 presidential race has unfolded. Instead, he marveled at the diversity of the large crowd coming and going in front of Washington’s most famous address on the morning of the Fourth of July: a California couple in American flag T-shirts volunteering to photograph an Asian family; a schoolteacher from Florida reveling in the idea that he was standing where Abraham Lincoln once lived; a British couple wearing crowns matching the one atop the Statue of Liberty. “It gives you a renewed sense of hope,” said Palmer, 51, a salesman visiting from West Virginia with his family. “It’s a scary time. I hate what’s going on. But coming down the street here and seeing all this, I thought, ‘Maybe everything will be good.’ There are so many nationalities here, and people seem to care about things. It’s time to think of participation in the political process as patriotism. To quote President Kennedy: “Change is the law of life. And those who look only to the past or present are certain to miss the future.”

By: Aaron Richards, WIPP Government Relations Intern Amid a captivating Presidential primary season – with a cast of characters as diverse as ever – it has been easy to forget the 469 other federal elections happening this November. Overlooking some of these critical races is a mistake for advocates looking to change policy under the next Administration. After all, it is Congress – and not the President – that holds the “power of the purse” and the ability to advance or block any White House agenda. The stakes for Congressional elections are enormous. With every House seat and a third of the Senate up for reelection, Republican and Democratic lawmakers have dreams of controlling the 115th Congress. We know the next Congress will look different than this one. Three incumbents have already lost in their primary elections including Virginia Rep. Randy Forbes. The loss of the 7-term Congressman from Newport News, VA is notable. His tenure as chair of the House subcommittee overseeing the Navy is considered a key reason the region received numerous Navy contracts. The impact of his removal could be significant for federal contractors in his District. Look out for other upcoming primary elections on June 28th in New York, Oklahoma, South Carolina, and Utah. On a larger scale, these elections may change control of the House or Senate. Historically, Congressional elections during a Presidential election year are likely to have a higher voter turnout, which has recently benefitted Democrats – who control neither chamber. In the Senate, where Democrats currently hold 44 of the 100 seats, only 10 Democrats are up for reelection. Republicans, however, have a steeper climb to maintain their current Senators. Of their 54 seats, 24 face Democratic challengers in November. Democrats are trying to pick up at least 5 seats to regain control of the Senate. Strategists are targeting Republican incumbents in Illinois, Wisconsin, New Hampshire, Ohio, and Pennsylvania as well as an open Republican seat in Florida (though at time of writing rumors swirl about Senator Rubio reconsidering running). Given the large majority of seats the GOP has in the House, most experts think Republicans have a strong chance of maintaining control. Just to be safe, Republicans have intensified fundraising to help defend that majority. Finally, Republicans have historically held most seats up for reelection in the House. With the final slate of primaries wrapping up, the field is almost set for the nearly 500 elections that will make up the federal government in 2017. One race in particular – between the nation’s first female candidate (of a major party) and an outspoken business leader – has dominated the news cycle. But for WIPP, as advocates hoping to shape policy, the Congressional elections warrant as much attention. We rarely (in fact never) make lofty predictions about the outcome – and with 5 months, hundreds of debates, thousands of commercials, millions of dollars, and any number of other unpredictable events that could change the calculus before November, there is no reason to start now.

By: John Stanford, WIPP Government Relations It’s a favorite phrase of my boss – and WIPP’s Chief Advocate – Ann Sullivan. The idea is nothing new: a simple solution is usually the best. That is why, for years, women business owners used the simplest possible idea for providing health benefits – you (employee) go out and get your own insurance and I (employer) will reimburse you. Simple, right? They are called Healthcare Reimbursement Arrangements, or HRAs, and bringing them back (for the second time) is one of WIPP’s top healthcare priorities. We are making great progress. The House Ways and Means Committee approved legislation that would allow HRAs to be used for firms with fewer than 50 employees. The House as a whole is expected to vote on the bill next week. The bill would allow employers to reimburse employees for qualified medical expenses like premiums and out-of-pocket costs. Importantly, employers must offer it to all eligible employees and cannot offer a separate group plan. The reimbursement is capped at around $5,000 for an individual and $10,000 for families and does not count as employee income (meaning no taxes!). Again, the idea is simple. Employers select an amount to reimburse employees, instead of locking in an insurance plan that may not fit their employees or their budget. But why did we lose HRAs in the first place? That is not so simple. The Affordable Care Act eliminated caps on health insurance plans—an undoubtedly good thing for when disaster or disease strikes. But, in the opinion of the IRS, these HRAs, by definition, had a cap (however much the employer contributed). So they were outlawed in 2013 or 2014. 2013 or 2014 is a strange way to describe when the IRS banned a certain healthcare plan. But that is what it was – the IRS notices on the issue were so confusing they had to issue additional regulations three times. Policy wonks, insurers, and healthcare consultants were unsure – let alone business owners – about whether they were allowed. And making a mistake on this carries severe penalties; offering a non-conforming plan can trigger a penalty of $100 per day per employee –more than $350,000 a year for a company with 10 employees. Because of this confusion WIPP stepped in asking Secretary Burwell to intervene on behalf of women business owners. She did and HRAs were allowed through June 2015. Legislation is needed to bring them back permanently and WIPP is optimistic Democrats and Republicans can work together, as they already have, to get this done. After all, ten million women business owners and their nearly ten million employees are pretty active voters. It’s pretty simple. More on how WIPP is working with Congress and the Administration to bring competitively-priced and accessible health options to women business owners is in our blog, Making the Affordable Care Act Work.

By: Jake Clabaugh With August recess (which actually begins mid-July) fast approaching, Congress is working feverishly to produce appropriations bills for the coming fiscal year. Both chambers– the House and the Senate – draft separate funding bills, which are then merged into the final funding levels presented to the President. As with most years, differences between the House and Senate dollar amounts for entrepreneurial programming government-wide will need to be addressed before the FY2017 funding amounts are known. The chart below compares current spending levels with AEO’s requests for FY17 and highlights the differences in funding from both bill versions: Microlenders have reason to celebrate as SBA’s program received $44 million in lending authority from both the House and Senate— a 25% increase from FY16. That program, however, is the only agreement between the two. The House provided a 25% increase for Microloan TA to $31 million, but the Senate kept funding at last year’s level of $25 million. The Women’s Business Center (WBC) program would get an additional $2 million in the House legislation, bringing their FY17 proposed total to $19 million from the FY16 $17 million. The Senate maintained that figure in their proposal. Notably, though, both the House and Senate increased their FY16 proposals by $2 million (the Senate was at $15 million in their previous, unaccepted legislation), highlighting the growing support for the much-needed program. On again, AEO’s efforts to save the PRIME program were successful in the House, which funded the program at $5 million. The Senate’s spending bill did not address the PRIME program, but the Senate has not provided funding for this program in previous years. Typically, the House numbers for this program have usually prevailed. The funding for the Department of Treasury’s Community Development Financial Institutions (CDFI) fund and Bond Guarantee Program (BGP) similarly has each chamber on a different page. The House, which in recent years has not provided specific authority for the CDFI Bond Guarantee Program, broke that trend this year with a $250 million guarantee—falling well short of AEO’s $1 billion request. The Senate bill allowed for $500 million for the program. Advocacy work will be critical during the upcoming months. AEO seeks to ensure that resources exist for the programs members rely on to reach microbusinesses and entrepreneurs. Attaining sufficient funding for vital entrepreneurial development programs takes passion and commitment. The good news is that AEO members have both.