Tag Archives: Small business

The $500 per family “HIT” tax on small businesses

Small business picks up Obamacare tab – Opinion – The Boston Globe.

Instead of supporting this type of innovative growth, the president’s health care law stifles it. The employer mandate — requiring employers with 50-plus employees to comply with expensive requirements — was long planned, left unexplained, then delayed. Many companies endured chaos as Washington contorted. Small business owners, always hit harder with the cost of compliance, don’t know what will hit them next.

Now business leaders are discovering a new provision, hidden as a “fee” on health care insurers. This is a tax that will be passed straight onto small businesses and their employees. The small business community calls it the health insurance tax, or HIT, for good reason — this is essentially a tax on Main Street USA. The added cost doesn’t affect big businesses; they self-insure their employees. The HIT only hits the health-insurance marketplace, where most small businesses and the self-employed purchase their health care plans.

The HIT charged to health-insurance companies will be passed on to small business. In turn, those companies, with typically slim profit margins, will pass the HIT on to employees. Since small businesses employ two-thirds of all the US workforce, most Americans will pay the bill. Families will pay up to $500 more each year beginning in 2014. The tax will actually increase over time, causing a greater burden in the years to come.

If you work for a small business, it’s time to “wake up” and realize these taxes will affect you. If you own a small business, you need to make sure your employees know about this tax and understand that the cost will be passed along.


Worst Law Passed in Four Decades

Obamacare: Worst Law Passed in Four Decades Must Be Stopped, Says Stockman | Daily Ticker – Yahoo Finance. (video at link)

So why should it be repealed?

It is the worst law ever passed in the last four decades by the federal government,” Stockman argues in the video above. “It is a massive entitlement to end all entitlements. It is going to cause a fiscal hemorrhage that is not even yet anticipated. It will tie up one-sixth of GDP in the most monstrous, massive, bureaucratic snarl that you can’t imagine. So therefore this needs to be stopped before it becomes operational.”

Lauren Lyster goes on to note…

Healthcare consultants like Jon Kingsdale — who helped set up some of the state exchanges — say these online Obamacare insurance “stores” will affect only the 5% to 10% of Americans who are uninsured (where they can now shop for insurance with transparency). Americans who purchase insurance this way qualify for government subsidies so that monthly premiums are not more than 9.5% of their income.

This is only partially true. Everyone who has an individual insurance plan IS affected. I repeat, EVERYONE who has an individual insurance plan IS affected. Ok, ok, one exception, if you purchased a plan prior to March 23rd, 2010 it has grandfathered status. But lets move on….

If you have an individual plan, regardless of income, it will either terminate or changed into an Obamacare Qualified Plan (QHP) sometime in 2014. The list price of your coverage will SOAR. Perhaps you will qualify for a subsidy but there are lots of loopholes such as:

  • Family glitch
  • CHP+ for children
  • Medicaid if your income is below 133% or 100% of the Federal Poverty Level depending on the state

There is also the issue of potential partial subsidy recapture if your income increases during the year OR even worse, a TOTAL subsidy recapture if you income ends up above the 400% FPL threshold for the year. That recapture can be quite high if you live in a region with high insurance costs, such as the resort area here in Colorado.

Getting back to David Staockman’s concern, Obamacare is an ever expanding ever growing entitlement. It does nothing to control costs except make sure that most of the plans offered on the exchange have small doctor/facility networks so it will be very easy to be out of network. Furthermore, the out of network coverage will be substantially less favorable than what is found today. So when the government gets around to trying to control costs, the blunt knife of government will only result in worse care for all and a very broken system.


IBD tracking Obamacare work hour cuts

ObamaCare: 258 Employers Cut Work Hours, Jobs In New IBD Scorecard – Investors.com.


IBD is introducing ObamaCare Employer Mandate: A List Of Cuts To Work Hours, Jobs — a compilation of employers who have opted to restrict work hours to limit new liability for employee health coverage.

As of Sept. 3, this list has reached 258 — including more than 200 public-sector employers.

Almost all of those employers have cut the hours of part-time workers to below 30 per week — the point at which ObamaCare’s insurance mandate kicks in.

A few have cut payrolls to steer clear of ObamaCare’s 50 full-time-equivalent-worker definition of a large employer subject to employer fines. A few others have reduced staff while contracting with employment services firms to limit their ObamaCare exposure.

This can hardly be called a surprise can it? My interpretation is that IBD is significantly undercounting the private employers who are reducing hours.


Employers weigh health care costs, penalties

Employers weigh health care costs, penalties.

Small nonprofits that pay no taxes can get tax credits. Some businesses that currently provide generous insurance may stop. And organizations could fork over more money covering part-time workers than full-time workers.

Example after example of small groups (2 – 50 employees) and the headaches that the Affordable Care Act is causing.

During the time Barack Obama was running for office, he said multiple times, ‘If you like your coverage, you can keep it. You don’t have to change,’ ” Richards said. “That is not true. Here is why.

“You know who is going to choose whether somebody can keep their plan or not? That’s me. My employees can’t walk up to me and say, ‘We’re going to keep our plan.’ No. I’m the one who makes that choice. I’m the one that’s paying the bill.”

And an employer’s priority, Richards said, is to keep the business running.

I knew from the beginning that people who bought individual plans would not be able to “keep their plans”. The quagmire faced by small employers is pure quicksand. It’s only a matter of time until small employers stop offering coverage, pay the penalty and their employees will find coverage on their state health insurance “marketplace”. “Marketplace” is the politically correct trem for “exchange”.

At least these guys have an extra year now.

Prediction: Chaos



Small business squirming from Obamacare

I really don’t believe people outside the castle walls would call this “unexpected”: 74% of small businesses will fire workers, cut hours under Obamacare | WashingtonExaminer.com.

Despite the administration’s controversial decision to delay forcing companies to join Obamacare for a year, three-quarters of small businesses are still making plans to duck the costly law by firing workers, reducing hours of full-time staff, or shift many to part-time, according to a sobering survey released by the U.S. Chamber of Commerce.

“Small businesses expect the requirement to negatively impact their employees. Twenty-seven percent say they will cut hours to reduce full time employees, 24 percent will reduce hiring, and 23 percent plan to replace full time employees with part-time workers to avoid triggering the mandate,” said the Chamber business survey provided to Secrets.

I believe there’s a 6 month lookback period on the determination of part time so if the small business portion of the Obamacare mandate hadn’t been delayed a year it would have been too late for these companies to change workers designation. I suppose they could have always fired them.


Obamacare Causing Nearly Half Of Small Businesses To Freeze Hiring:

Obamacare Causing Nearly Half Of Small Businesses To Freeze Hiring: Poll.

Small business owners’ fear of the effect of the new health-care reform law on their bottom line is prompting many to hold off on hiring and even to shed jobs in some cases, a recent poll found.

“We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didn’t realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized,” said attorney Steven Friedman of Littler Mendelson. His firm, which specializes in employment law, commissioned the Gallup poll. (emphasis added – Ed)

Really? Attorney Steven Friedman needs to venture out into the real world a little more often.

Forty-one percent of the businesses surveyed have frozen hiring because of the health-care law known as Obamacare. And almost one-fifth—19 percent— answered “yes” when asked if they had “reduced the number of employees you have in your business as a specific result of the Affordable Care Act.”

So if you’re looking for a job, on average a small business isn’t a great place to start.


Obamacare Progress – Joe Klein

Obamacare Progress | TIME.com.

In an error ridden article, Joe Klein is happy to report progress in the implementation of Obamacare.

Good news is that the Obamacare application has been reduced from 21 pages to just 3 for a single person. Apparently Joe gets this part right, although we won’t know for a fact until tomorrow morning.

Tomorrow morning the Administration will announce a spiffy, new 3-page application for individuals (which we’ll attach here when it becomes public).* There will be an 7-page application for families (11 including the appendix), but even that one will be far better designed than the initial effort. “We did a lot of work testing words, to come up with simpler language,” an Administration official told me, “and we did time tests. Our average was 7 minutes to fill out the paper version and even less if you do it online.”

But Joe can’t leave good enough alone and me makes the snarky comment:

This compares favorably with applications for private insurance plans, which average about 17 pages (and can go as high as 35).

C’mon Joe, say it ain’t so. Continue reading Obamacare Progress – Joe Klein


Obamacare and part time workers

Will Obamacare Turn America Into a Nation of Part-Time Workers? – seattlepi.com


Part-time workers fall into the gray area of the PPACA in that only full-time employees of corporations numbering 50 or more persons are required to be covered. Businesses are under no obligation to offer health care benefits to part-time employees, nor will they be penalized by the federal government for not doing so. What this has done is create the impetus for a dramatic shift from full-time to part-time workforces.

Problem for part time employees: Continue reading Obamacare and part time workers


“Would you like a side of health care with that shake?”

Surprise: McDonald’s Franchisee: ‘Obamacare Will Negatively Hit Us Like Nothing Else’.

Here’s one thing you likely won’t find a McDonald’s franchise owner happy to ask his employees anytime soon: “Would you like a side of health care with that shake?”

That’s because some of the fast food chain’s franchisees say that the costs associated with President Obama’s health care reform law will cut deep into profits, according to a recent survey of 25 McDonald’s owners conducted by Janney Capital Markets obtained by The Huffington Post.

Of course there’s the counterpoint…

Others contend that these worries are overblown. A study last fall estimated that businesses with fewer than 100 employees can actually expect their costs to go down because of Obamacare. Besides that, most employers don’t appear overly concerned: Almost 90 percent say they would not cut employee hours in order to avoid paying for health insurance, a recent poll found.

I really don’t believe these people have done the research.


Is the Small Business Administration Going to Help Small Businesses Get Out from Under Obamacare?

PJ Media » Is the Small Business Administration Going to Help Small Businesses Get Out from Under Obamacare?.


“Right now, if you are a small business and you want to provide healthcare, you can barely get a quote,” she said. “Now, if you have an affordable health care marketplace which will exist in every state by next fall, there will be enrollment and by next January small businesses will have the opportunity — not the requirement but the opportunity — to participate and buy healthcare on those exchanges.”

The response did little to appease Risch, who argued that rather than affordable healthcare the top priority among businesses “is staying in business.” Many are facing difficulties doing so “because they can’t compete when the government tells them they’ve got to spend money on something they don’t want to spend money on or they want to spend money the way they want to spend it not the way Washington, D.C., and the people who work here tell them they have to do business.”

Gesturing behind him toward a stack of documents about seven feet high – a “red tape tape” Senate Minority Leader Mitch McConnell (R-Ky.) has been using to represent the regulations to implement the Affordable Care Act – Risch said businesses “are trying to get out from under this.”

“They’re trying to get away from it,” Risch said. “They’re trying to get around it. They’re not embracing this. You don’t see anyone coming up hugging this stack of documents saying, ‘look this is what I want to do.’ They want to get away from this.” (emphasis added both instances – Ed)

Indeed. Perhaps once they have it shoved down their throats they will decide it doesn’t taste so bad.