Small business group joins health reform lawsuit

U.S. President Barack Obama speaks about health insurance reform during a visit to Portland, Maine April 1, 2010. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) - An influential small business lobby group said on Friday it had joined 20 states in a lawsuit arguing insurance coverage requirements in the newly enacted healthcare overhaul are unconstitutional.

The National Federation of Independent Business announced its decision ahead of a news conference in Florida with state Attorney General Bill McCollum to discuss the lawsuit.

McCollum is seeking the Republican nomination to run for Florida governor and was one of the first state officials to sue the federal government over President Barack Obama’s sweeping healthcare reform passed by Congress in March.

“The outpouring of opposition to this new law was overwhelming and our members urged us to do everything in our power to stop this unconstitutional law,” NFIB President and chief executive Dan Danner said in a statement.

“Small business owners everywhere are rightfully concerned that the unconstitutional new mandates, countless rules and new taxes in the healthcare law will devastate their business and their ability to create jobs,” he added.

The NFIB has about 350,000 members and initially had supported efforts to overhaul the $2.5 trillion U.S. healthcare system to help bring down soaring costs. But the small business group ended up opposing the legislation that was passed by the Democratic-led Congress.

Danner said small businesses want reforms that help reduce costs and increase choices.

“But this new law resulted in more bad than good for our nation’s job creators. And this law is a bridge too far in terms of the future of our constitutional freedoms and liberties,” he added.

The states are challenging the bill’s central element, a mandate for nearly everyone to purchase health insurance. The bill also includes fines for larger businesses whose employees seek subsidized coverage on state insurance exchanges that are to be up and running by 2014.

Reporting by Donna Smith; Editing by David Alexander and Vicki Allen