The ACA and Small Businesses

[Magox]

I read two articles today regarding the ACA and how it would impact small businesses.

 

 

Manor’s company employs 45 people. If he brings in just five more, his business would soon be subject to new minimum coverage standards under the 2010 law — and he does not know whether his current health plan would meet this threshold of coverage or how his premiums might be affected.

 

“These changes are less than a year away, and I still have no information about how much our premiums are going to cost,” said Manor, owner of Bittersweet Catering, Cafe and Bakery. “It definitely gives me pause when thinking about adding another location.”

 

Nearly three years after the health-care law was passed, federal regulators have only recently begun to define its terms. Major pieces of the overhaul, such as state-run exchanges that will serve as marketplaces for qualified health insurance plans, have yet to take shape, and several rules remain unwritten. Consequently, the picture remains anything but clear for small-business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short.

 

“There is tremendous confusion and fear among many of my competitors and other business owners in my network, particularly about what you have to cover and how you have to report,” said Hugh Joyce, owner of James River Air Conditioning in Richmond. “In speaking to them, I am convinced that the primary reason we aren’t seeing a robust economic recovery is the uncertainty and costs associated with this health-care law.”

 

 

 

The Department of Health and Human Services three weeks ago issued a final set of regulations on the minimum value for health insurance packages, mandating that plans cover at least 60 percent of health expenses and 10 primary areas of care, including maternity, ambulance and prescription services.

 

Joyce, whose company employs 150 people, provides what his insurers tell him will “probably qualify” as adequate coverage under the new rules, but he isn’t certain.

If his current plan falls short, experts say he won’t be alone in deciding whether to find a suitable alternative or pay a penalty.

The minimum-benefit plan mandated by the law “is broader than what’s currently offered by a lot of small businesses,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group for providers.

 

Zirkelbach warned that even firms that already offer sufficient coverage may see their premiums surge under the health-care law. New rules that restrict how insurers can structure their rates could drive prices higher across the board, he said, while small firms could be hit indirectly by a new fee on insurance providers, which some fear will be passed along to individuals and small employers in the form of higher premiums.

 

The situation only gets thornier for Joyce, who also owns a small art gallery with one full-time employee. Rules proposed this year by the Internal Revenue Service suggest that workers from separate firms owned by the same person will be totaled to determine an employer’s ultimate size. If so, Joyce will probably shift his gallery employee to part-time hours to avoid having to add coverage at his second business.

 

The IRS proposals include formulas for factoring part-time and seasonal workers into employee totals and calculating the penalty for failing to provide coverage — but none of the rules are set in stone, nor has the agency determined how employers will prove they provide adequate and affordable plans. The IRS is still collecting comments on the proposals and plans a public hearing in late April, so the final rules are not likely to be published until summer.

 

Meanwhile, many employers have seen their premiums rise or plans disappear as insurers prepare for the coming changes.

One in eight small-business owners who responded to a survey by the National Federation of Independent Business said their health insurance providers had notified them that their plans would be terminated. A study released last week by Adecco, a human resources consulting firm, showed that nearly a third of employers said they stopped hiring or cut their workforce because of the law.

 

http://www.washingtonpost.com/business/on-small-business/health-care-law-uncertainty-grips-old-town-alexandria-cafe--and-other-small-businesses/2013/03/20/64bfd218-8a69-11e2-8d72-dc76641cb8d4_story.html

 

 

 

What’s slowing down job creation in Nevada, where the real unemployment rate — counting part-timers who would prefer full-time work, and those who’ve given up looking — averaged 20.3 percent in 2012?

One prime suspect is ObamaCare, with its mandate that employers with 50 full-time employees or more must offer health insurance — not just some high-deductible coverage for catastrophes, but a costly package including every kind of politically correct bell and whistle.

 

Left-leaning college professors with guaranteed government pensions and a belief that the end justifies the means may say it’s a minor problem, but the fact is that small companies with any number of employees between 25 and 100 — that’s a lot of employers — are eyeing the 50-worker ObamaCare mandate and making their desperate survival plans accordingly.

 

How do you think a Reno resident would fare today if he or she applied for a job at a local Jimmy John’s sandwich shop? The chain was growing in 2011. Then Timothy Wulf, a retired economics professor who owns JJ of Reno, operator of the shops in Northern Nevada, realized his staff of more than 100 put him right in the bull’s-eye for the ObamaCare mandate.

So Mr. Wulf says he began cutting workers 18 months ago — and not because business was bad. He sold one of his three stores, retrained workers to handle more duties and invested in labor-saving technologies. Automated online ordering, for example, replaced the equivalent of two full-time workers. (Where are they working now, do you suppose?) Given the number of part-timers working at any sandwich shop, Mr. Wulf managed to reduce his work force to 42 full-time equivalent workers.

 

So, beginning to next year, who will be able to offer a sandwich of the same size and quality for less: Mr. Wulf, or a competitor with 52 employees?

Mr. Wulf is one of the rare employers still willing to speak up. After Darden Restaurants, parent of Red Lobster and Olive Garden, said last fall it would sensibly cut worker hours to avoid the insurance mandate and thus hold down prices for customers, socialist advocacy groups organized boycotts. Executives said in December their honesty may have contributed to a big fall in quarterly earnings.

“Let’s face it: We’re not really out of the worst recession in my lifetime, and now we’re asking employers that may not yet have recovered financially to have another burden on them,” Michael Caparso, an employee benefits specialist with National Healthcare Access in Las Vegas, tells the Review-Journal’s Jennifer Robison. “It’s the first thing we hear from employers: ‘I’m just going to cut everyone between 30 and 40 hours down to 29 and be done with it.’ They also tell us they’re going to freeze hiring, because they don’t want to risk going over that (50-worker) threshold.”

 

http://www.reviewjournal.com/opinion/editorials/obamacare-detriment-hiring-recovery

[Dean Cain]

Remember who actually wrote the ACA. The ACA is a give away to the large private health insurance lobby, thought up by the same Ivy Leagurers that brought us too big to fail Wall Street banks in the form of their genius algorithm's for derivatives, mbs's, & cdo's.

 

ACA is another rent seeking consification of our wealth. As a small business owner I am wondering how much this is going to screw me.

Edited March 22, 2013 by BigCountryBills

[B-Man]

Even if you have coverage,

 

who will assess you in a few years.....?

 

OBAMACARE: 6 in 10 physicians will retire earlier than planned...

 

.

[peterpan]

Anyone with the slightet bit of foresight saw this coming from a proverbrial mile away.... coming like a freight train.

Edited March 22, 2013 by peterpan

[B-Man]

ObamaCare Turns Three: 10 Disturbing Facts Americans Have Learned.

 

 

#10 really hits home, after the complete disruption of the U.S. Health system. whats the bottom line ?

 

 

Leave millions uninsured. After 10 years, ObamaCare will still leave 30 million without coverage, according to the CBO.

 

As IBD reported, that figure could be much higher if the law causes premiums to spike and encourages people to drop coverage despite the law's mandate.

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Edited March 22, 2013 by B-Man

[Magox]

The tea leaves from the implementers are not optimistic at all. Consider the latest lines from Henry Chao at CMS: “Chao was frank about the stress and tension of the compressed time frame involved in setting up the exchanges. “We are under 200 days from open enrollment, and I’m pretty nervous,’’ he said. “I don’t know about you,” he added, to murmurs from the insurance industry audience. Members peppered Chao and Cohen with many questions about the format for the health care policies they will submit to HHS for approval so the plans can be marketed in the exchanges. Chao said the main objective is to get the exchanges up and running and signing up the uninsured. “The time for debating about the size of text on the screen or the color or is it a world-class user experience, that’s what we used to talk about two years ago,” he said. “Let’s just make sure it’s not a third-world experience.” You’ve had three years and billions of dollars to work with, and you’re talking about being fearful of a “third-world experience” in the exchanges?

 

Read more: http://www.realclearpolitics.com/articles/2013/03/22/obamacare_at_three_headed_toward_failure.html#ixzz2OInDsXDK

 

 

[TakeYouToTasker]

What's to worry? These corporations are doing just fine, this will get some much needed liquidity into the economy. I mean, c'mon, I'm smart because I'm not chained to some conservative ideology like the rest of you, and this solution is completely pragmatic.

[DC Tom]

You know what's brilliant? A federal application for health insurance, 21 pages long, that has only two pages about anything medically related. Everything else is about your total family income (including kids' jobs).

[IDBillzFan]

Every Dem, lib and progressive must be so proud of this signature law. All the work...all the bribery...all the arm twisting. Just to bring around a piece of legislation that every sane person knew was going to be a bust.

 

Oh, wait. They'll just say ACA wouldn't be like this if only it was single-payer.

 

How fun it must be to live with a never-ending pocket full of excuses.

[Magox]

There is so many things wrong with this bill, from what I anticipate which is an explosion of costs that will be passed down to our Federal debt, to the massive expansion of Medicaid that will crush state budgets 10-20 years out, the rising cost of premiums, the effects on small businesses, shortages of primary care physicians. I honestly believe that the health care law stands a good chance of collapsing on it's own weight and that we will see either a major reform of the bill or an outright repeal.

[Doc]

So we'll go from 15M uninsured to 30M uninsured, we'll have a massive shortage of doctors, quality will suffer, lawsuits will increase, premiums will rise, cancer rates will rise, and we'll add 3T (at least) to the deficit. What's not to love?

[B-Man]

 

Obamacare official on exchanges: “Let’s just make sure it’s not a third-world experience.”

 

FTA:

Now, Obamacare feds are conceding the same. Gary Cohen, head of the Center for Consumer Information and Insurance Oversight, is the one charged with getting this bird off the ground, and has faced grilling from even Democratic lawmakers worried it will crash on take-off.

 

It seems now, there’s “some possibility” that exchanges might not be functional in October of this year. Expect a lot more backtracking before fall:

 

{snip}

 

My ideological objections to Obamacare aside, this thing is and always was a beast for implementation and going to a burden on businesses, particularly small ones. It’s something critics pointed out during the bill’s debate and passage, and they were called charlatans for it. Now, the challenges are personified in the stories of Baked in the Sun bakery, which employs 95 people, but is looking at losing half its profit margin to insure them under the new law’s requirements.

 

Or, there’s Bittersweet Cafe, a local favorite in my area, which employs 45 people. Its owner Jody Manor is understandably hesitant to add another branch and new jobs, which would take him over the 50-employee mark, making him subject to far more regulation under the Affordable Care Act.

 

The helpful, heartfelt message of the Left for these hard-working small business people trying to stay above water, employ fellow citizens, and deliver good products in a down economy while trying desperately to anticipate the costly implications of a law the feds haven’t even bothered to finish writing after three years? Quit whining.

 

This thing has already broken every major promise made to pass it

 

— it’ll save families money,

 

it’ll save society money as a whole,

 

it won’t add a dime to the deficit,

 

and you can keep your plan if you like it.

 

Come October, we’ll likely find out just how much more can break.

 

 

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[birdog1960]

one of the most thoughtful and analytical summaries on the subject that i've read: http://annals.org/ar...ticleid=1558549

Edited March 22, 2013 by birdog1960

[DC Tom]

one of the most thoughtful and analytical summaries on the subject that i've read: http://annals.org/ar...ticleid=1558549

 

It's anything but.

[Nanker]

It's anything but.

Seriously. Sweet Jesus, that's the answer to the question: What does a Newhouse grad who can't find a job in the mainstream media produce to earn their gruel?

[birdog1960]

Seriously. Sweet Jesus, that's the answer to the question: What does a Newhouse grad who can't find a job in the mainstream media produce to earn their gruel?

you realize that the ACP is the largest specialty organization and the second largest physician group (to the ama) in the us, right? does this piece not tell you anything about the diversity of opinions re the aca among docs. there will be plenty of comments but this opinion is far from fringe.

[Doc]

The article is devoid of reality. Sure a well-planned "journey to a health care system that covers nearly everyone while lowering per capita spending is one that is well worth taking." This isn't even close to being it and as a result, the opposite effect will occur, as the CBO has stated.

[Dean Cain]

The article is devoid of reality. Sure a well-planned "journey to a health care system that covers nearly everyone while lowering per capita spending is one that is well worth taking." This isn't even close to being it and as a result, the opposite effect will occur, as the CBO has stated.

 

What would be your policy prescription Doc?

[birdog1960]

Sure a well-planned "journey to a health care system that covers nearly everyone while lowering per capita spending is one that is well worth taking."

is it? according to conservatives? not what i hear...left to their own devices this would never occur through the hands of conservatives. the aca is just the first step towards these goals for liberals.

[Doc]

What would be your policy prescription Doc?

I'd force everyone to have insurance. No exceptions, and that goes for the politicians. HDHP's/HSA's would be the preferred insurance so that the consumer is responsible for his/her health care spending. Allow insurance to be sold across state lines. I'd mandate how to live and penalize people for not following it. Tort reform.

is it? according to conservatives? not what i hear...left to their own devices this would never occur through the hands of conservatives. the aca is just the first step towards these goals for liberals.

You're saying conservatives don't want everyone covered and/or costs to go down? Or that Obamacare is the worst way to achieve those goals?