All the business networks, Fox, Bloomberg, CNN, et. al., have finally figured out that Obamacare is really tax, but as an article in Slate pointed out last week, is there really anything for small business to fear? They think not, and we largely agree, aside from the tax issues, which we’ll get into.
Additional post: There’s another potentially serious gotcha clause which one of my Solutions Forum clients supplied in one of our meetings today: a company has to keep its present insurance company and all the policy provisions if under 50 employees in order to remain exempt from the Obamacare mandates to provide employee insurance. In his case, and others potentially,this means no changes in deductibles, either, e.g., from $1,000 per year per family to $2,000 per year per family. How did he find out about this nasty provision? His insurance agent, who has a well-deserved reputation for really being up on business insurance, told him well in advance of his scheduled policy renewal. Everyone’s insurance agent should be so proactive.
1. Nothing happens until Jan. 1, 2014, aside from the provisions outlined below, and all the nickel and dime taxes, which presumably start Jan. 1 2013.
2. A program is already underway to offer subsidies to firms that want to offer subsidies to their employees who earn less than $50,000, to purchase insurance. Your insurance agent should know more about this.
3. If your business has less than 50 employees, you are exempt from any mandate to offer insurance. No one other than Slate has mentioned this at all, but we recall from our first reading of the Act that it’s true. So, with (1) above, nothing much changes aside from the taxing provisions and the subsidies.
4. Now, the really bad news, is that, as we recall, the tax provisions start now, meaning Jan.1 2013. There are something like 21 various taxes on goods and services that are buried in the language of the Act, and the Supreme Court presumably left those alone. All these taxes amount to something like $500 billion a year, which is huge. So, even if you don’t have to change anything on your business health care plan, you personally are going to pay for others’ doing it. This might account for NFIB’s hostility to the plan as it came out of the Supreme Court.
5. Many popular provisions of the Act, such as preexisting conditions, 26 year olds on isurance policies, etc., are being offered by major insurers, although you’ll probably pay for them in your overall policy costs.
6. Now, it’s a really good idea, as we heard in a commentary by Hugh Hewitt recently, that the Republicans lay out a plan for improving the whole Act. The Democrats certainly won’t do it, since any President who’s ever proposed a tax increase has been trouced at the ballot box.
7. As your policy comes up for renewal, our Solutions Forum members are finding that they can’t change provisions in their insurance policy without running the risk that they might be thrown into mandated coverage.
8. A couple of our Solutions Forum members reminded us that there are modifications to Obamacare if your business has less than 50 employees:
a. If you have more than 15 employees but less than 50 employees, you get a $3500 tax credit for health insurance, but until Jan 1, 2014, nothing changes.
b. If you have less than 15 employees, you’re exempt from having to mandatorily provide insurance to your employees, which is basically current policy.
Now, don’t take our word for it, because, as we said above, the business news media has done an abysmal job of reporting this major concern for all US small business.