Small Businesses Challenge Health Law : Shots - Health News The National Federation of American Business says the new law would impose unconstitutional insurance mandates, new taxes.

Small Biz Group Joins States Challenging Health Law

It's official. The group representing small businesses across the country just joined forces with those who are challenging the constitutionality of the new health law.

"Small business owners everywhere are rightfully concerned that the unconstitutional new mandates, countless rules and new taxes will devastate their business and their ability to create new jobs," said National Federation of Independent Business President and CEO Dan Danner.

The move comes despite the fact that the Obama administration and Congress took great pains to include help for small business.

The new law provides an immediate 35 percent tax credit to small businesses that provide health insurance to their workers. That credit will rise to 50 percent in the year 2014. And small businesses will be among the major beneficiaries of the new insurance "exchanges" that will make health insurance more widely available, also starting in 2014.

But, Danner said, NFIB members are concerned about more than new rules and potential new costs. "This law is the first time the federal government has required individuals to purchase something simply because they are alive. If Congress can regulate this type of inactivity, then there are essentially no limits to what they can mandate individuals to do,” he said.

We've got a clue as to how the administration will respond. Earlier this week, the Obama administration put out its first legal brief defending the law in a separate lawsuit filed in Michigan.

Writing for the administration, Justice Department officials defend the merits of the attack on the law. "Congress rationally determined that the minimum coverage provision is critical to the comprehensive regulation of health insurance," says the brief. "That...places the provision within Congress's Commerce Clause authority."

And, for good measure, they argued that the case is not yet "ripe" for a challenge because the mandate doesn't even take effect for three more years.

Meanwhile, NFIB's retreat to a stance opposing major health overhaul is also something of a return after a brief sojourn on the other side. The group was one of the most influential foes of the health plan that died during the Clinton administration.

Since late 2007, the group has been one of the four big name sponsors of the group "Divided We Fail," an unlikely alliance pushing for a comprehensive health overhaul that also included the AARP, Business Roundtable, and labor union SEIU. Its mascot was that odd little purple half donkey, half elephant.

But, as it so often the case, the group's unified push for universal health insurance coverage splintered with the actual writing of legislative language.

The NFIB hated the bill passed BY the House last November. It called it "the 'how to' on how NOT to do healthcare reform." And it didn't have much warmer feelings about the Senate bill – The one that eventually became law, albeit with some changes.

The bill, said NFIB in a three page, single-spaced letter, "fails the small business test and, therefore, fails small business."

So while Republicans are cheering that the group is joining the lawsuit now challenging the law, it's hardly a big surprise.