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How the HR-7 Anti-Abortion Bill Will Hit Small Businesses

Women's March On Washington - MarchWomen's March On Washington - March

Just days before thousands of pro-life demonstrators are slated to march in Washington, the House passed a bill that permanently bans federal funding for abortions. The same bill would also deter small employers from offering comprehensive reproductive health care coverage in their insurance plans.

The No Taxpayer Funding for Abortion Act, which passed 283-183 on Tuesday and is known as HR-7, is a stunning retort to the hundreds of thousands of women who marched around the country to defend their right to reproductive freedom on Saturday. It formalizes an older statute called the Hyde Amendment, which bans federal funds from being used for abortions. It also restricts abortion coverage in the private marketplace.

The Senate must approve the bill before it becomes law.

Passage of the law would have implications for small businesses that purchase plans for employees. Right now, most employer-based health insurance covers abortions, according to the American Civil Liberties Union. If HR-7 becomes law, small businesses that offer such coverage will no longer qualify for a tax credit that offsets premium expenses.


The tax credit, which has been available under the Affordable Care Act (ACA) since 2010, covers up to 50% of employer-paid premiums for businesses with 25 or fewer employees when average wages are less than $50,000. Employers are eligible for the credit for two consecutive years.

Approximately 200,000 small businesses have claimed the health care tax credit annually since 2010, according to a report last year by the Government Accountability Office.

Congress passed the Hyde Amendment in 1976, several years after the Supreme Court’s Roe v. Wade decision that legalized abortions. The amendment bans Medicaid and other forms of federal funding to pay for abortion except in extreme cases. Up until now, the Hyde Amendment has been a rider that’s attached to federal spending bills; if HR-7 passes, it will become permanent law.

Some legislators reacted strongly to the HR-7’s passage in the House, and expressed concern about its potential impact on entrepreneurs and their workers.

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“H.R. 7 punishes small-business owners who offer comprehensive health care to their female employees, even when it comes entirely from private funds,” said Rep. Betty McCollum (D., Minn.) in a statement Tuesday.

Small-businesses groups including the National Federation of Independent Business, the Small Business Majority, and National Small Business Association declined to comment about the legislation.

Representative Christopher Smith (R., N.J.), who sponsored the current bill, has introduced similar versions twice before. Both versions died in the Senate in 2013 and 2015.

Smith is set to speak at the March for Life event Friday.