By Rebekah Rast –
ObamaCare will cost our nation more than $1 trillion. However, as Obama’s health care plan begins to unfold, it is clear it is going to cost our nation more than just red ink.
If the mandates and taxes in ObamaCare are left as is, it will cost America growth, innovation and jobs.
Victoria Braden and her team of experts work with small businesses as a human relations/employee benefits consulting firm. She is the CEO and President of Braden Benefit Strategies in Georgia. Braden is well versed in what is to come for her clients as they face benefit changes beginning Jan. 1, 2011 — when new mandates of ObamaCare kick in.
Tucked inside the 2,000-page law are new mandates that will affect business owners. ObamaCare has many of these businesses worried, confused and afraid. Some of her clients have already closed their doors for good.
“They are afraid,” Braden says. “They are not sure what’s coming. They hear all these things and they want to know what’s happening.”
Most of Braden’s clients are companies with 300 or fewer employees. Many of the new regulations in ObamaCare affect them. She is taking the changes one year at a time. “I am just taking it one step at a time. My clients are doing all they can to survive now,” she says.
With many of the new taxes and mandates in ObamaCare being rather vague, it will be hard to know what kind of damage they will do to small businesses until they are enforced.
Braden says one big change in 2011 that will hit small businesses hard is employers will be forced to give the same benefits to everyone in the company. She gave this example: If a restaurant owner covers 90 percent of the health care costs for his managers, but only 50 percent of the costs for the rest of his staff, he will be forced to cover everyone at 90 percent or 50 percent. Every employee has to receive the same coverage and their W2 forms next year have to reflect how much their employer contributed to their health care plan.
“I’ve had several companies say that they are just going to drop employee’s insurance altogether because they can’t afford it,” Braden says. The problem is, ObamaCare coverage doesn’t kick in until 2014. Individuals who need health insurance and can’t get covered elsewhere have to be uninsured for at least six months before they can apply to receive the high-risk pool insurance coverage, which provides a buffer for the uninsured until ObamaCare coverage starts. However, even the high-risk pool insurance is underfunded and won’t cover everyone that needs insurance, including people with pre-existing conditions.
Regardless, starting in 2011, employers have to obey this mandate, which includes all full-time employees defined as those who work 30 hours or more.
“As a business owner, when you can’t make payroll, yours is the first to go,” Braden says. “We will see a whole bunch of 29-hour employees — especially in the fast food and retail environments — and an increase in seasonal workers.”
There are many more taxes and mandates that are harmful to the small business environment.
“Small business owners are on the front lines,” says Chief Economist Raymond Keating of the Small Business and Entrepreneurship Council (SBE Council). “They are skeptical and they should be that way.”
Does any part of ObamaCare help small business owners?
ObamaCare does offer a small business tax credit. But don’t be deceived. It is touted as a good and helpful tool for small businesses, but is rendered useless for many of them. There are a series of four tests a business has to go through before they can even qualify for a tax credit. It comes down to the size of your business —t he amount of health care costs you pay per employee and how many employees you have.
Dan Danner, president and CEO of the National Federation of Independent Business (NFIB), comments on this tax credit in a Wall Street Journal article.
“The credit, which is only available for a maximum of six years, puts small business owners through a series of complicated ‘tests’ to determine if they qualify and how much they will receive. Fewer than one-third of small businesses even pass the first three (of four) tests to qualify… More importantly, the credit is temporary, but health-care cost increases are permanent. When the credit ends, small businesses will be left paying full price.”
This doesn’t provide much incentive for a small business who receives a tax credit for only two years to increase its capital and hire new employees when it knows the growth will be short lived.
“ObamaCare is all negative for the small business economy,” says Keating. “Two-thirds of new jobs every year are created by small businesses.”
In this economy, there is nothing needed more than new jobs. The taxes and mandates in ObamaCare are on their way to further damaging our economy and job market.
Many of the mandates in ObamaCare are folded into the health care system over time.
One such mandates is an insurance fee. Overall it is an $8 billion tax — that escalates to $14.3 billion by 2018. This is a tax on insurance companies based on their market share with small businesses paying the bulk of the tax. This law excludes self-insured plans — plans most big businesses and labor unions offer. Therefore this tax will be passed onto plans that a majority of small businesses and individuals buy.
“This is just another tax on small businesses,” Braden says. With so much uncertainty of what 2011 holds for small businesses in regards to ObamaCare, she isn’t even telling her clients about this mandate yet — hoping things will change before it is enforced.
Why is this Administration killing the very engine that drives America?
“I feel like yelling, STOP!” Keating says. “So much damage has been done we need to go back and undo what’s been done. Stop the madness.”
Braden is equally as frustrated. “There are some really good ways to get out of it,” she says about the current situation of the economy and the negative effects of ObamaCare. “There are some great minds out there if we listened. They could figure it out if they’d get out of Washington and listen to the people,” she goes on to say about the leaders of our nation.
“Obama gives lip service to job creation, but his policies are destroying the American dream and the jobs created by small businesses,” says Bill Wilson, president of Americans for Limited Government (ALG).
Entrepreneurs are smart. Those small businesses waiting to see what will happen when more ObamaCare mandates go into effect will adjust to the changes — even if that means less growth and more Americans unemployed and unable to support their families. That would indeed be a new face of America — and not a pretty one.
Rebekah Rast is a contributing editor to ALG News Bureau.
