people aren't willing to pay for the insurance despite the fact that we're continuing to increase our contribution. and it's become a situation where i've got to believe -- i only know from my own experiences what we're dealing with. but i've got to believe there's a lot of other small businesses around the country that have experienced the exact same thing. i think if you multiply all those, the net loss is significant. >> would the gentle lady yield? i just would like to relate the fact that in massachusetts, when they passed the law and implemented it, the target of the young people were not signing on. and then later on they did enroll into the health affordable care act. so we believe that type of trend that we saw in massachusetts will be seen throughout the country. >> can i answer yours? okay. you know, so for my own personal

situation, i'm in one of the rural areas with very high health insurance. and low -- lower income. our county has about 99,000 as a population with an average household income of middle 40,000s. as i struggle to provide more health insurance and they aggregate the businesses to make it -- you know, if i can stay under that 50, i will. it will be extremely expensive for me. in the meantime, to absorb a 40% to 44% health insurance increase, it would be much easier for me to put my employees out on the exchange. it's a lot cheaper for them to provide that than for me to absorb that additional cost within my small profit margins anyway. so thank you. >> i would just comment that if the additional cost of adding each employee would be approximately $4,000 to provide insurance to that individual at an affordable rate, it may be a

smaller figure in some places, higher in others, that does stunt the job growth. i will say that the law itself is having an impact on -- on the cost. and we are seeing people not enroll in the coverage that maybe in the past they would have enrolled in because the costs are just higher. and we do see and traditionally have seen young individuals not enroll in the coverage even if it costs them $20 a pay period. and it's a matter of individual choice. they are looking at the coverage and they are saying i would rather have the money. in the bigger picture in the context of wages, if people would rather have the money, the affordable care act takes that off the table if they have to be offered the insurance. >> thank you.

we'd like to yield five minutes to representative leuthemeyer. >> one of the things i think we're seeing and you discussed today is the problem with companies trying to deal with this. i know there was an economist in the committee here recently. and they had done a small business survey. and 76% of the businesses that were surveyed said they were not going to hire in the next six months. ms. walker, you have mentioned in your testimony here something like not hiring workers or eliminating working hours. have you seen this already with your practice, that businesses are starting to limit their hours? can you give me an idea of the number of businesses you're talking about? >> what i've seen is that businesses tend to hire new workers at less than 30 hours. so when we have to expand, we're going to expand on a part-time basis. >> okay. >> one of the other things i saw in a statistic yesterday for a

slide presentation, if you go back two years, there were six full-time workers hired for every one part-time worker. that has flipped now in such that it's one full-time worker hired for every four part-time workers. those are dol statistics. >> thank you for that. ms. bogardous, in your comments a while ago, if i got this right, correct me if i'm wrong here, you made the comment that your company doesn't write some groups because they may not be a related business. in other words, you're not sure if they would fall under this rule or not, so as a result you back away from doing that? did i understand that correctly? >> actually, we're an insurance consults and brokerage firm. we see the insurance carriers doing that and refusing to write certain groups some of it may be the confusion among the carriers. they're still exercising their

leeway when they can refuse to write a policy. >> even though they may technically, if they did the research and dotted their is and crossed their ts to qualify, just the unintended consequence, just the concern about they may be in noncompliance is enough to back them away from that. is that what you're saying? >> that's correct. it may be a smaller -- a smaller entity, a smaller subsidiary in one state without the headquarters location. and so it could not be the location or situs for the insurance contract as a whole and they back away from it. >> you work with this every day. are all the rules promulgated now on the president's health care law? >> no, sir, they are not. >> how many do we have to go yet? >> the rules -- the rules we have currently on the very important issues of -- of play or pay, the employer mandate, were issued in early january last year. we have a lack of final

guidance, a lack of guidance on very industry and employee specific issues. there are impacts and unintended consequences of the rules that have already been issued that need to be fixed and resolved. and we do not know basic information such as whether we will get transition relief for particular situations such as counting the employees for purposes of 2015. we're less than a month away from the calendar year that is most at issue, 2014 starting january 1st. and an employer needs to know. so we're lacking guidance. we're kind of operating in an area of, this is what we know today. which is the case. >> how can you help that company plan with the uncertainty that just sort of hangs over them with regards to the rules aren't promulgated yet as well as we don't know the unintended consequences of what may or may not happen here? >> we like to address that with a three to five-year strategy.

we always have a plan "b." if they change the rules in this manner, then we'll go this direction. but we advise -- we do have some small business clients, but we advise many, many large employers. and i know that not every small employer has access to advisers with the level of sophistication that we would bring. >> mr. winstanley, thank you for being here today. it's always great to have someone who deals with this on a daily basis. ms. baker, you as well. because you give us the real life experience of how the consequences and unintended consequences of stuff that goes on here in washington affects real people in the real world. how much time and how much money do you spend on compliance with this health care law? mr. winstanley? >> it has been a very significant distraction from our business over the last couple years. especially as we try to ascertain where it's going to go, where things are going to land. our administrative -- some of

the folks that help with our administrative stuff, they've spent a lot of time, i've spent a lot of time on it. some of my -- it takes a lot of our energy. >> ms. baker? >> i've been flooded with questions and phone calls over the last year with my clients. just, you know, there's just a lot of confusion, wondering if, you know, they have to start providing the health insurance. when would it be mandated, what do they have to do. i guess i've not tracked the time specifically, but it has definitely been a burden on my practice to try to answer all the questions that are out there. >> and the cost and all those hours are born by your business and therefore that's not making you any money. >> absolutely. >> thank you very much for your testimony. >> we do have time for another question or two. at this point i'll yield five minutes to representative hahn. >> thank you, mr. chairman. ranking member velazquez for holding this hearing. you know, it would be nice to hold these hearings with the

thought that if we did hear some unintended consequences that impact our small business, that we had the belief that our friends on the other side would actually like to work on fixing some of these problems. i get frustrated in these hearings because i know the main purpose is just to have more bad stuff to talk about and to attack the affordable care act. i -- i would love for this committee to actually work on some fixes. and i think we even heard some some offers of compromises that might make it better. but i'll tell you, you know, that's not going to happen. we don't have partners on the other side that actually want to look at this law, how it does impact your businesses we, and e any time or effort to fix it. we're more than willing to work with our friends on the other side to fix things that do have

unintended consequences. being members of the small business community, we love our small businesses. we're for our small businesses. this is one of the committees that i enjoy when i go back home to my district in los angeles, is is talking to my small businesses and finding out what we can do here to help them out. so it's frustrating to know that there's no intention on the other side, all the testimony you give, nobody is willing to work with us to try to fix this law. having said that, you know, i'll ask that to ms. bogardus. so, these business aggregation rules already apply to many aspects of business law like arissa and cobra. so i know some of these small businesses founded a su eit a s possibly, that it also included their compliance as it related to the affordable care act. so maybe you can explain to us

why it came as a surprise when these aggregation rules already existed and small businesses were in compliance in other areas. and maybe there are some small businesses that are having to come in contact or in compliance with these aggregation laws for the first time. and maybe -- let us know why it was a surprise. maybe, too, what kinds of small businesses are experiencing this for the first time? what kinds of businesses that maybe never had to comply with this law before? even in other areas. >> yes. representative hahn, thank you. the answer to that is that while these rules have been in effect for quite some time, they affect arissa, cobra, medicare, secondary, a number of technical issues including retirement plans. if a business has not offered a retirement plan and has not offered a health plan, then the

analysis simply has not been done. e even if the small businesses offered a health plan, again, there's not been the analysis. the insurance carrier says how many employees do you have. the small business employer answers for the group that he's covering. nobody has the ability, time or authority to sit down from the insurance carrier and work with that employer to determine its size in particular over the entire control group. that's just simply not todone. the carrier has no obligation nor consideration for whether the rest of the control group is addressed or not. so it does come as quite a surprise. >> i think the difference is that the mandate -- this is a mandate, whereas where it's providing health insurance, i can provide health insurance to just some of my workers and not others. so it's all been voluntary before. >> what criteria will you use to decide which workers will get

health insurance? >> it's often driven by the industry. >> okay. >> different industries have different types of retirement plan, different types of health benefits. >> but when people say more companies will be dropping their plans, their health care plans, i just -- i don't know what facts or impeerical data or research will drive anyone to conclude that, in fact, people -- companies will drop health insurance. because when we hold hearings here, one of the biggest issues that companies and small business bring to us is to find skilled workers. and i'm sure that in order to retain those skilled workers, if you provide health care as one of the package job offer, that

they will be more than willing to come to your company. thank you. >> thank you. before i yield back, no balance of my time, i just wanted to throw out one more statistic today. the adp national employment report which measures private employment says small businesses led the way in job creation with 102,000 jobs this november. thank you. >> there's never enough jobs. so i'd like more jobs. we'll cut it down to the wire. >> thank you, mr. chairman. having just looked at those employment statistic, considering we need to be around 300,000, 350,000 creation every month, we're still devastated, upsidedown when you look at our workforce participation. because we're up against the clock, i'm sure the chairman will hand you some time when we're done.

>> is it bogardus? am i even close? >> bogardus. >> bogardus. just because i've heard some of the discussion, you've already explained it twice, i don't want to ask you to do it again the third time, on the aggregation rule, how different these aggregation rules are in regards to what you're seeing in the new health care law compared to what we do -- have done in the past in pension and tax and mechanics. can you sort of help explain some of the healthcamechanics a they're different. >> i may yield some of this question to ms. walker. the mechanics are different simply because employers have not done this in the past unless they've offered their retirement plan. in many cases unless they're operating under a safe harbor they may not have done the analysis. in terms of what we're seeing in actual real life, i know there's been discussion of jobs creation

and whether employers are hiring or not hiring. i would caution you on the statistics that you hear and answers to surveys. because i know that many of our clients will not answer that question because they have seen the fallout in the industry, whether it's restaurants or other industries, from answering and addressing questions like that. so i don't believe that you're getting a complete picture. >> mr. chairman, one day that might be a complete different hearing. because we had that happen once in arizona where some voluntary surveys that were filled out turned out to being -- waking up to being audited the next day. ms. baker, now, with your background in the cpa world, or i could always turn back to our lawyer friend, let's deal with the reality of businesses trying to survive. we had a hearing yesterday at what many of the small banks are having to do to survive.

have you started to have clients with smart lawyers coming to you saying, how do we have to now game the system? do we have to put this in a trust, hide this, hide that? you don't have to throw anyone under the bus but have those conversations begun. >> i think most of the businesses i deal with, that's the first question they ask me, is what do i do to avoid this. >> in many ways, one more time as our regulatory command and control society grows out of washington, we're going to turn a lot of our friends out there's businesses into trying to find a way to game the law. you know, we're -- in many ways just to survive. >> of course, i advise them not to. but that is their first reaction, is what do i have to do to avoid this. >> mr. -- is it winstanley? >> yes. >> now, you have a number -- you've actually -- if i remember

your testimony, some of what you wrote, you've actually reached out and invested some of your capital to start other businesses? and yet that may be now pulling you into the business aggregation. does this become sort of a chilling effect on you helping capitalize new economic growth around you, and have you actually been approached on how to game the system? >> it's one more variable to take into account. every time we do something. about gaming the system, of course -- you know, there's always -- how do you figure -- where do we stand on this? where are we set up so it's applicable or not applicable. one we have to figure it out, which has taken considerable resources. and we think we understand it. but, you know, i think it's -- i think the issue is in the distraction from the business. >> all right. mr. chairman, just because we're down to that about 3 1/2 minutes, we actually sort of

heard a lot of this in yesterday's hearing. where how do these small banks help economic growth, create jobs, take care of a lot of our brothers and sisters out there and the arrogance that we as policymakers keep dumping on to our country and our job creators. at some point we've got to make -- wake up and decide, this isn't partisan. it actually should be about, you know, the people we, you know, represent and not the vanity here of trying to justify things we've done that don't work. mr. chairman, with that i yield back. >> thank you. at this point in time, we do have votes as you can see. so we will adjourn for i would say give or take 30 minutes. after which we will reconvene. for right now we will be adjourned.

>> the committee will reconvene. >> i would next -- what do we got? okay. >> thank you very much, mr. chairman. ms. walker -- and thank you, all of you, by the way, for coming in today and testifying. ms. walker, in your practice you advise small employers. correct? >> yes. >> have you found that their situations present difficult issues under the rules such as complicated family business arrangements, overlapping shareholders? would you discuss some of these situations, please? ms. walker. >> are you referring to me? >> i'm sorry. walker. right. mrs. walker. >> i think one of the best examples is the one that donna used. and that was an elderly woman who had invested in two

restaurants. she invested in a restaurant for her son in one -- in one state. and a restaurant for her nephew in another state. and that required aggregation rules. the other situation was a family business where they were making investments. and one of the investments was a golf course. the golf course was not in the same area. those two businesses then had to be aggregated. >> mr. chairman, don't we need to have the clerk here? >> oh, are we missing someone? uh-oh. thank you, ms. velazquez. i guess we'll pause momentarily. oh, okay. we can continue.

go ahead. >> still on my time? >> yeah. >> thank you. is it -- is it mr. winstanley? winstanley? >> yes, sir. winstanley. >> thank you. do you have a tax specialist on your staff? >> no. not on our staff. >> so whom would you consult for guidance on the business aggregation rules? >> we would hire an outside counsel for that. we've attempted to read them ourself. but we would have to hire somebody outside. >> and how much -- how much is it to hire somebody? >> it ranges. but it's expensive. >> very expensive. i mean, lawyer by the hour, right? >> right. >> okay. and so it's pretty costly? >> yes. >> $1,000? $2,000? >> i imagine with the nature of our businesses, it'll be significantly more than that? >> are you talking 5,000? 10,000? >> maybe more. >> more than that? oh, my goodness.

mr. -- or ms. bogardus. did i pronounce it right? >> yes, sir. bogardus. >> most webinars or power point presentations do not include business aggregation rules. does your company's? >> we address the issue. we consistently refer -- we're an insurance consulting and brokerage firm. we consistently refer our clients to their tax and legal advisers because it is so complicated. they will have a better understanding of -- of any corporations, any business arrangements that they created. it also requires in many cases an analysis of options. family trust documents that were created for purposes other than addressing business aggregation. so it can get extremely detailed. >> well, how does small businesses know about this

aggregation rules, how they affect them? how do they find out about this? >> you know, quite frankly, their adviser, if they're working with an adviser who mentions it to them. >> an adviser that costs more than $10,000? >> if they have -- if they have current legal counsel, if they're working with a consultant or a brokerage firm that raises the issue to them, if they read about it on their own, they know there is information posted on the irs website as well. >> forgive me. are you an attorney? >> yes, sir. >> you're an attorney. so the way i understand attorneys charge is they charge by the hour. and that includes research. correct? >> yes, sir. >> so if i had my attorney -- i wanted to know about the health care law, he'd have to read thousands of pages of regulations? and he would be charging me by the hour to do that? >> it would not necessarily require the attorney to read the entire health reform act. but it would require analysis

and, quite frankly, experience with the control group rules. which are very specific, very detailed. and that is a very specialized area of the law. >> so if my attorney, my normal business attorney, is unfamiliar with that, i have to go find another attorney. and he's going to charge me -- holy cow. thank you. i see my time's pretty much run out. i yield back my time. thank you, mr. chairman. >> thank you, mr. bentivolio. at this point we'll yield five minutes to representative barber. >> thank you, chairman, and representative for having this hearing. i appreciate the witnesses' testimony. it's very helpful to hear directly from individuals who are affected or trying to help others who are affected by the law. my wife and i ran a small business in our community for 23 years. so we know a little bit what it takes to meet a payroll, keep the doors open, keep customers coming back and deal with

regulations and taxation issues. we're very sympathetic to small businesses on a number of levels. and we also know that the businesses have to stay profitable and they have to find a way to grow. so all of these issues are very important to me. that's why i wanted to be a member of this committee. so i could see along with my colleagues what we could do to help small businesses be more successful. since i've come here last year, in june, i've been trying to partner with people on both sides of the aisle to find reasonable fixes the affordable care act. i think there are many benefits. we've realized many of them already with individuals and so on. now we're into the larger implementation with small businesses and individuals. the benefits are real, but the issues are real as well. i think with any major piece of legislation, over the decade, we've always had to make amendments and revisions to a bill of that size and magnitude. so i'm clearly interested in learning more about that from

you. clearly, as i look at this, and i've heard your testimony. when i listen to people back home, small business owners, i'm reminded that there are three cs that they often talk about. they talk about the aca's complexity, that it's confusing, and that it's challenging. my job as a member of congress, and i believe all of our job, is to get through all of that and help people be successful and understand the law. so i have the same question for each of the witnesses. if you could make one change or if you could ask one question to be resolved by the agencies that are responsible for the affordable care act, what would your top priority be? because i think we need to have some instruction or some ideas from witnesses about what we can do. my colleague was asked about, let's figure out what to do that makes things better, not just talking about back and forth, arguing. let's talk about what we can do to fix things. what would those things be from

each of you, if you could? >> i'll go first. i would position the aggregation rule to fulfill the scope that it was originally designed to fulfi fulfill, which was promoting the growth of business. i would treat the industries separately within the context of what the industry is and deal with the work forces within the context of what they are to position the law to be viable for all industries. >> ms. baker? it's hard to choose, i imagine. >> it is. i would definitely support, you know, looking at it industry by industry, looking at it by control, true control, not just ownership or indirect attributed ownership. you know, someone that is actually making day-to-day decisions, and i do think that the 50 employees is too small.

it's too small. >> thank you. >> ms. bogardis. >> with the rules that impact small businesses, i would suggest taking a second look at where the rules are with respect to the insurance carriers because there's knot the same level of compliance required of them that would support the employer mandate. i think some of those gaps in the law which make it difficult, if not impossible, for businesses to actually get the coverage would specifically need to be addressed. if i can go off the topic of small businesses, i would say it would be revisiting the definition of minimum essential coverage and the plans that will be offered -- and i'm sure some of you have read about them in "the wall street journal," the skinny plans. there was an article that was about six or eight months ago. they will not be sufficient coverage, but they will satisfy the employer mandate. and i think when individuals

realize that they have coverage that is not sufficient but it is what the law required employers to purchase and provide, there will be significant backlash like none of the backlash that we've seen so far to date. >> thank you. >> i take the same approach. we're looking at the insurance product. i think the real issue with health care in this country is that the quality of care is not what it needs to be. the american -- the aca didn't really focus on quality except in a very small segment with some research. so there's a lot more that needs to be done there. and again, i think that the required insurance, the types of insurance doesn't make it very easy for people to comply with the rules. >> thank you for your testimony and your good answers. i yield back. >> thank you. at this point, i think mr. bentivolio had a few add-on questions.

oh, i guess we'll yield to you first. >> thank you, mr. chairman. i apologize for sliding in a little late here. i thank the witnesses for joining us today. couple questions or comment at the beginning. i think it was ms. walker and others had mentioned that the changes you were looking for would take a legislative change in order to make that happen. and i appreciate that perspective. but what we have seen with the affordable care act, that's not necessary to make the changes from this administration. we've had ten executive actions by which -- and employer mandate is one of those. you know what, you've got another year. and ms. baker, i know when people call you, i don't know as a consulconsultant, it makes yo really tough when you don't fknw what the rules are, or they tell you the rules and say we're delaying it another year. we've had that happen in other

arenas. how do you handle that will? how do you answer that question when the irs hasn't finalized rules on this and they can change the rules? i'll give you one example. i had a business in salina, kansas. they were noted in the local paper on july 1st. they made their changes. that was their renewal period. they did everything they had to do. what a mistake. on july 2nd, the president said, just kidding, we're going to suspend that part for another year or delay the mandate and those kind of things. what's the answer you give to folks that definitely must be calling in saying, well, what does a one-year delay mean? i'll ask that question to ms. baker first. >> it does make it very difficult, especially for a small firm like mine. we have such limited resources, so you know, you take the initiative to communicate everything and then all the sudden it changes. so you reach out and have to recommunicate. so the amount of time and the expense associated with that is

great. >> other responses from the panel? >> sure. it consumes a phenomenal amount of energy that's not used on something else constructive. fortunately for the restaurant side of our business, we're looking at it saying, this just isn't sustainable with our current business model. so something's got to be done before this gets rolled out so we can feel some level of comfort that something will happen. hopefully that's not a pipe dream. >> well, and i have yet to see anything from the white house that they want to make any changes legislatively to this act. i mean, there have been many suggestions of things we could fix. we've heard them here, heard them multiple times on this committee. and no interest in changing one letter of the law unless it's by executive action. and that is certainly unacceptable to me. one thing i'd like to ask ms.

walker on another issue as far as the trend of basically a part-time economy. the new hires, according to the department of labor. i didn't know they were that bad. in this economy, four out of five new jobs, was that the figure you had, created are part time? >> for every one full-time job that's created, there's four part-time jobs created. >> okay. so when you average the hours, that's not quite four to one. four out of five new jobs. >> and the thing that -- well, that's surprising in and of itself to me. but the trend. and i'm not sure whether it was 2010 to 2012 or what with the years were, but the trend, it's flipped. used to be six full times to one part time versus one to four. >> that is really a devastating figure. it's not devastating for us in this room. it's the folks out there looking for a job, particularly young people, which have been the most devastated in this lack of long-term economic recovery.

can you describe a little more what happens and basically this part-time economy, you know, where you're trying to work around, trying to avoid these mandates. people might say, well, why aren't you providing health insurance for somebody that works 20 hours a week? there are reasons. it's costly. it's costly. and trying to make those demands in a changing, uncertain environment where you got to look and say, well, you can't work this much this weekend. the reality is, it's not just figures. i've heard from my district story after story of small business owners saying, you know, congressman, i didn't hire anybody this week. i'm not going to hire anybody next year because i'm worried about the threshold. i don't know what the rules are going to be. i'm not going to take that risk. and these are successful businessmen and women. but the message we're sending from washington is that, you know, we'll let you know next year. it doesn't work that way. any further comments from you all? i know i'm about out of time. but that's the frustration i'm hearing.

>> i would just add -- thank you. i would just add it's an issue crying out for leadership. leadership in terms of what you're doing here today. that is seeking out the truth. what is the truth? what are the facts? then coming to at least some sort of agreement on what you can agree on. i mean, the american people, the small business owners, the large business owners, they want to see some sort of a solution to these problems other than the issues being raised and the lack of a solution just being acceptable or considered inevitable. we need somebody to -- and a group of people, perhaps, to step up and say, something's got to change. because we can't sit back and watch the train go down the tracks with the bolts flying off. because we know what's going to happen. and this is our country, our economy, our fellow citizens, the children, the young people trying to get jobs, people trying to grow a business,

business own who are are trying to do planning, who are putting off expansion, putting off buildings, putting off all kinds of things that could create and generate other jobs not just within their own businesses. construction work, another thing. so it's crying out for leadership, and i would say this is a great start and i would continue down that path. >> thank you. i yield back. >> thank you. that was a great summary, actually. at this point, i'd like to yield five minutes to mr. payne. >> thank you, mr. chairman. >> mr. payne, would you yield for one second? >> yes. >> okay. i just -- if not -- >> you're the ranking member. please. >> go ahead and use your five minutes. i will come back. i didn't want to lose the train here. >> ma'am. >> ms. walker, you mentioned and it struck me, that number. one out of five jobs are part-time jobs. what was the number that you.

>> for every one full-time job created, there's four part-time jobs created. >> we had a hearing that i mentioned before. we have the expert witness dean baker from the center for economic and policy research. he said the vast majority of people who work part time do so voluntarily. in many cases, they have family or other obligations that make part-time employment desirable, even with the current weak labor market. more than two-thirds of the people who work part-time report they do so voluntarily. thank you for yielding. >> thank you. well, you know, it's just an observation. you know, the affordable health care act is a law. very new in its infancy. naturally, there are going to be issues around the implementation. we know the problems that we've

had to this point, but the meat of the act, i think, will revolutionize health care in this nation. you know, if we look back at other large programs that have been implemented over the course of time, one being social security as probably the easiest one to mention, when it was implemented, it was going to destroy this nation. we were going to socialism and how could we do this, it was going to ruin the nation. i think most americans now think that social security is part of the fabric of this country. so i see the affordable care act having the same type of life in this nation. you know, when they started social security, they used your

name as your identifier. well, guess what? they had to tweak the system because there were a lot of donald paynes and ms. bakers and what have you, so they went to social security numbers. so nothing is perfect when it starts. you have to let it evolve into something that's going to work. so i like to use that example because it's probably the easiest example to use in terms of rough starts for large programs that are successful over the course of time. and ms. baker, in your testimony, you state that this law leads small business owners to provide health coverage in an industry where that's not the norm. well, let me just say that -- you know, i want to the say that upsetting the norm is precisely what the affordable care act is about. over the last decade, health insurance premiums for small firms have increased 113%

leading to dropped coverage. the affordable care act was enacted to upset this norm and make it easier for small businesses to compete and offer quality benefits. the norm prior to the law allowed insurance companies to drop coverage for employees when they needed coverage the most and discriminate against people with pre-existing conditions. the law upsets this norm. prior to the affordable care act, it was normal for an average u.s. family and their employer to pay an additional $1,000 for uninsured people to cover that cost. the affordable care act aims to upset this norm by bringing the uninsured into the system, driving overall costs down. now, there are issues with the law that need to be tweaked, but the bones and the substance of the law are good and are here to stay. further, 96% of u.s. businesses

have fewer than 50 employees, and according to the last census data, less than 1% of businesses have between 45 and 49 employees, placing them at risk of falling into the abyss of the employer mandate. again, that is less than 1%. now, i'm interested in addressing valid concerns about the affordable care act. you've stated many today, such as the compliance and the burden on small businesses. however, i really find it nonconstructive to continue to play on the fears of the american people rather than work on ways to make this law better and see it implemented successfully. so, you know, over the course of the last two days, i've heard the president speaking before groups and saying, if you have ideas, and i believe he's reaching out to our colleagues on the other side, if you have ideas that will strengthen the

law, then let's discuss it. but to continue to try to tear it down and sabotage it and not even allow it to go through its natural courses is counterproductive. so, you know, in terms of solutions -- and i'm very open to the criticism and the potential of making it stronger. so i'm glad to hear your testimony. mr. winstanley, you mention ed - >> yes, sir. >> you mentioned the e-flex coalition that advocates for greater flexibility and options within the law. i understand that the restaurant industry has a unique makeup. what proposal does the coalition have to provide flexibility while upholding the law's goal of expanding insurance coverage

for all? >> i don't -- where do you see the e-flex? oh, it was referenced in the regulations. i'm not familiar enough with that. what i would like to speak to, though, is you mentioned social security. to my generation and every generation behind us, what social security is known for is being a completely unsustainable program. i would also like to mention that we -- you and i got started. i got started with a 24-hour diner. it had about 10 or 12 employees, my twin brother and i stayed up a all night building that place and turning it into a business. i've been fortunate to have some good advice from people over the years that have done similar things and what they've shared

with me time and again is that -- which turned out to be true in our case, is every next step you take is harder than the step behind you. there's significant growth burden that comes with trying to build a real business. and the 50 employees, regardless of what industry you're in, the 50 employees presents an additional significant hurdle for people who are trying to build something meaningful. i think it's counter to the spirit of this country. >> thank you. the gentleman's time has expired. mr. bentivolio wanted to ask a follow-on question. >> thank you, mr. chairman. just a few short questions. mr. winstanley, health care law requires you to inform your employees about the health insurance choices available to them. is this an additional burden and expense for your companies? >> i'm sorry, it requires us to inform them about the health -- yes, there's a significant amount of education that goes

on. as anybody can kids knows, it's hard to educate somebody who's not interested to hear what you're saying. the -- you know, it's traditionally been challenging for us to educate to the groups of people that we were able to provide health insurance to. so yeah, i see that as being a very significant challenge. >> i was back in the district last weekend. i had dinner at a restaurant. the waitress came over and recognized me, a big supporter. she told me her story, that she lost her job, now is working two jobs all because of the health care. she had lost it when they found out about this employer mandate before they delayed that, right. they had to reduce their employees. now she's working two jobs. do you have a lot of waitresses or people on your staff that are working two jobs to make ends meet? >> we have a significant number of people doing that. and we have -- what we've seen is there are a lot of people who need part-time jobs.

that's because wage and job growth in permanent full-time positions hasn't been there while the cost of childcare and housing continue to increase. >> you think that's largely attributed to the affordable health care act? >> i think it's attributable to a general slowdown which the health care act is very much influencing. >> so let's see. ms. baker, under the aggregate rules, a collection of two or more corporations with common stock ownership that are connected in one of several ways, many small businesses don't issue stock. how would the rules be applied in those cases? >> they look at ownership, so if you're not a corporation, they look at investment and equity within those companies. so in my example, when i invested in a small women's

boutique just as an investment, i don't manage or operate that on a day-to-day basis. those employees are then pulled into my cpa firm as part of the rules of aggregation. >> and increasing the cost. >> and increasing the cost. even though, you know, mr. payne mentioned that the norm, you know, i think the norm is we'd all love to provide health insurance in every industry, but that's a very small women's boutique. there's very few other women's boutiques that would have to require health insurance because they're small businesses and not meeting the 50 employees. for me to have to provide health insurance makes me not competitive. just because i'm an entrepreneur and owned businesses in different industries. >> let's see if we can sum up. higher deductibles, higher premiums, additional legal costs, correct? tens of thousands of dollars for a small business. and you're less competitive.

thank you very much. >> thank you, mr. bentivolio. at this point, we'll call a hearing to the close. i want to thank all of our witnesses for being here today. it's very timely. i think what some people do forget is even though the employer mandate, the penalty portion has been delayed a year, the calculations as to whether or not you will have to comply start in three weeks' time. so on january 1st, that's the first beginning of what will be 12 monthly buckets of keeping track of the hours and the employees to see if you hit the 50 ftes or not. so it is a very timely situation. we certainly heard a lot of give and take, i think. we all recognize that there will be changes that will be needed in this law and hopefully now the president would agree to make some changes. he has not up until this point

in time recognized that, but i think an overwhelming number of americans today are expressing displeasure in the law. and certainly as we heard today, compliance with the law and the application of the complex aggregation rules is a burdensome and is confusing for business. and i think it almost goes without saying that a big government, one size fits all set of regulations and laws that tell a business what benefits they have to offer, whether that's a restaurant, a construction company or a high-tech manufacturing company, is, in fact, a drag on the economy. today's hearing did highlight another example of the unintended consequences of the affordable care act, namely the high cost to business of hiring a cpa or other tax adviser to give advice on the irs aggregation rules, money that is better spent on growth and the creation of jobs. we on this committee will continue to closely follow the

implementation of this law and its effect on small business. i would ask unanimous consent that members have five legislative days to submit statements and supporting materials for the record. >> yes, mr. chairman. before we close, i just would like to thank all the witnesses, and it's kind of a breath of fresh air to hear that we're talking now about fixing and looking at ways where we could improve the implementation of health care. so it's great to know finally that we are moving beyond repealing obama care to finding common ground to make it work because it's the law of the land. thank you. >> thank you, ranking member. with that, without objection, this hearing is now adjourned.

[inaudible conversations] [inaudible conversations] stanback good afternoon, everybody and welcome to the oversight committee subcommittee on assistance disabilities and affairs outcome can't order. for the past year, members of the subcommittee as well as full va initiatives on in order to

fulfill the secondaries: disability benefits claims for 2015. vba implemented national initiatives within its regional offices, including challenging quality review teams come at those certification test them, simplified and fully developed claims. bba also rolled out technologies in the form of the veterans benefits management system and several other electronic projects as those two processing models for future again it might cross functional team. all along, dba indicated significant support and training from central office would be critical in this rollout. on top of the challenges on april 2013, va announced that all cases pending in excess of one you would be completed by the conclusion of fiscal year 2013. based on the new push instituted many months of mandatory overtime for its employees.

bothers to consult on whether va employees were able to issue decisions of high quality within the extradited timeframe, there's also concerns that many of the oldest claims in fact were highly complex. regional office employees have previously reported that claims processes of passover difficult cases and would routinely decide to call at easy claims first in order to meet the production goals of the workload and workload credit parameters. thus it would stand to reason that many of these 2-year-old and 1-year-old claims cited in the past quarter constitute the challenging workload. today we will hear about a focus issue, which ties into the va's initiatives and highlights the clear necessity of uniformed central office support and thorough employee training. today's focus is on the complex

claims in the special ops lanes to include multi-claims this luster might reinjury, posttraumatic stress, military trauma and claims involving special monthly compensation just to name a few. while va reported in november of this year that complex claims, which take an exceptional time to require special handling on the const to 10% of va's workload, these claims require highly competent, educated and experienced attention. it is importantly decisions rendered in his complex claims often have tremendous effect on the lives of these veteran. within va strategic plan refresh for fiscal year 2011 to fiscal year 2015, the department of veteran affairs noted no fewer than three times the strategic lan is results driven and back while we would be measured by

our accomplishments and honor promises. so today we went to your accomplishments. what is going on in this high-stakes highly restless claims processing environment? collis employee focused on the development of issues than what is working and what's not working? also, much here but the folks at best edition of the out sub inspector general to look at specific complicated claims on an annual basis within the regional office. reviews of va oig reports as well as recent veteran testimonials are alarming. in the past four years at least 19 regional offices have been inspected by the oig on more than half the decrease in a claims processing accuracy with respect to commit brain injuries. the reports indicate the oig visit to the 10 regional office evidenced more errors than the initial visit.

with respect to temporary 100% disabled claims, while improvements have been made on half of the offices are in fact it still could not process 50% of these claims correctly on their second inspection. there's still no other word for this but i'm except the bull feared at this time, i would like to welcome our witnesses. we will have three panels here today. currently seeded are the participants. panel one include ms. is lower in united states navy retired accompanied by mr. james price, also united states navy retired to our hero we have for veteran warriors here to mr. price's last is ms. betty mcknight, a company by mr. glenn bergmann, partner at bergmann more llc. after the conclusion, we will hear from mr. sherman gilman, associate director for veterans benefits with your last veterans

of america. mr. ronald abrams for the national veteran legal program and mr. zach hearn, deputy director for claims at the american legion. finally, the third panel we will hear from mr. tom murphy, director compensation service or company name by ms. edna macdonald, director for national regional office. the third panel will host ms. ms. sondra mccauley, deputy assistant inspector general for audit and evaluations with office of inspector general u.s. department of veterans affairs who will be accompanied by mr. brent arronte, director of san diego benefits inspections division. additionally the hearing record will include written statements from disabled american veterans. the tragedy assistance program for survivors than ms. schaffer's wife of the

veterans with instructions complete, thank you for being here today. i now yield to the ranking member for her opening statement. >> well, thank you, mr. chairman. and thank you wrote in this important hearing. i also like to thank the witnesses here today for their time and trouble to come and share information with us. first, i want to applaud the va for reducing the benefit by 34% in march of 2014. we know the va can maintain this momentum and we are optimistic. we want to end this decade-long backlog and we are moving in that direction. our numbers indeed show the va is on track to reach the secretary's goal by 2015. i would ask you to relay a message to the people who work for the va and tell them thank you for their efforts and to please keep up the good work. as the vba continues to work

through this transformation, it is very important that we are working together towards solutions that will improve the process of providing benefits to veterans benefits that they've earned him i want him to be provided in the most timely and efficient manner possible. so we need to be forward-looking and so we can address the next issues rather than just the problems from the past. we want to be able to anticipate what is coming down the road so we don't create any new backlog issues. earlier this year, our subcommittee work on a package of bills that are forward-looking and i believe would help the va provide better services to our veterans. the house has passed many of these measures. they were bipartisan measures and i hope the senate will take them up and send them onto the president for his signature. one of the bill specifically was my bill, pay as you rates, which i think is appropriate to today's topic is to look at complex cases that have more than one issue involved with

them. this bill would require the va to pay veterans of each of their individual medical conditions is completed. such an approach would result in veterans throughout southern nevada in my district in the country in receiving their payments in a more timely manner rather than waiting until the entire case is adjudicated, which can be very complex as well here. they can get pieces done as they go along. additionally, it seems that such an approach would offer the va better workload management options for some of the best va regional offices could specialize on this medical conditions, which have proven to be more challenging than our complex such as military trauma and traumatic brain injury. my colleague, ranking member has introduced a bill that would provide veterans with better decisions in a timely manner by doing just that. look forward to seeing that logo reappeared i'm proud to say we

seem to be making progress that's reducing the backlog, but they're still clunkiness in the operations and effect of nicer lack of effectiveness. for example, i'm concerned the va may be oversimplifying over complicated and complex medical can nations. the va has essentially broken down the coding system with nearly a t the va has essentially broken down the coding system with nearly a thousand different medical conditions and atmosphere ripples into just three lanes. easy, medium and hard. that seems a pretty simplified way of working at all these different variables. when you define complexity is a number of medical conditions and claims, i am not sure that is inadequate way of looking at it. it is important to note the number of conditions doesn't necessarily dictate the complexity of the entire claim. this method of evaluating complexity make sense in a paper processing world, but as we look forward now to best practices, i

believe complexity should be measured not just by the number of conditions, but rather by the complexity of evaluating and paying for the medical conditions that are under consideration. it's important to va look across all 56 regional offices to determine what our best practices for assigning the complicated work. we believe the vba can work with vbms to ensure the best employees are working on the most challenging cases. this subcommittee and i thank the chairman for his work on this weekend for his cooperative finance with our site of the aisle. the va's share a common goal and that is ensuring veterans receive the best benefits in a timely fashion. i think we can continue to work together as a committee with the va to develop these tools and best practices and i look

forward to hearing your testimony and see what options may be available to us as we move forward. with that, i yield back. thank you, mr. chairman. >> thank you, ms. titus. with that, i ask unanimous consent that chairman miller and the ranking member be able to participate in our hearing today. hearing no objections, so ordered. at this time, i would welcome our first panel to the table. your complete and written statements will be entered in the hearing record. mr. and mrs. price, thank you for your service and for being here this afternoon. mrs. price coming are now recognized for five minutes for your oral testimony. >> thank you, chairman. chairman runyan, ranking member of nine, members of the panel, better and faster to express gratitude for inviting ourselves as delegates to represent their views on the va's handling of

complex claims and the challenges that are faced with most of this panel has no idea who veterans awareness is. it's exactly what it sounds like. we are just a bunch of veterans. but we are specialists that come from a wide variety of fields and bring in some cases decades of experience table in the team. our perl-based is to do with not just complex claims, but all issues relating to the va function. in particular, i am a combat that. i served in the navy for seven years before i was medically retired. i contracted a terminal lung disease in iraq. i also crushed both of my hands, parts of my hands and had to have my hands rebuild. i am 100% disabled. i can no longer work in my life expectancy now is probably less than two years.

my husband is my primary caregiver. i don't need anything from the va any longer. my complicated claim took four years to adjudicate. not once enough for years that i ever present one single piece of new evidence. the entire claim was submitted fully developed in its entirety before i was discharged from the navy. i am here not to represent my claim are my issues. my husband and i are here to make sure that this panel and everyone that will listen to us all understand that cases like my own and unfortunately likenesses mcnutt's are not isolated. i personally have dealt with at this time almost 1000 cases just in the last six months of veterans and spouses and children who are dealing with complex claims that are being denied over and over and over

again for being lowballed and zero rated. we are not adsl. we're not a veterans service organization by any means. our sole purpose is to work to get resolution to the manner in which the va is conducting business. however, we are not going to sit here and lie to anybody. we are going to make sure everyone understands that we do not agree with giving kudos to the va. over the last 12 years, the majority of the veteran that have come home and come into the system have filed complex claims. this was in a secret to the va. they were well aware of what was coming home. you have a demographic of veterans that have spent its full deployment come in various hostile environments, home. they are better educated now than they ever have been in history. they're also equipped with

technology available that at a moment's notice can get information to virtually any question you have regarding benefits. the va pictures this as a disaster waiting to happen because these are the veteran that are filing complex claims. on november 7th, secretary shin seki took credit for reducing the backlog by one third since march. we caution this panel and everyone involved with va claims to don't take that as gospel. it's a big part of the claims process and that they are not telling people. the most insignificant type of claim is not a medical claim. it is called a dependent status change. you get married, have a child, get divorced, your child features out. it is one document with one attachment from your marriage

certificate, divorce decree, what have you. those going to claims. they are adjudicated right alongside him unless a terminal lung disease for agent orange illnesses. unfortunately, those claims and we have been able to prove it to the subcommittee, those are the claims that they are closing and calling close in adjudicated. unfortunately, that does help numbers come down. we ask that every time you get a new report on the va's numbers, you look at a cautious way. you question the data. they are not sending in screenshots of their work products. they are creating reports. there is almost no transparency. no wonder mr. can sit down and look at all the numbers the va is working on that are generated on a daily