So it looks inevitable now…the healthcare bill will probably be passed tonight. Without getting into the politics of it, how will this impact small businesses? How will this impact your company? Or will it not have any impact at all?
My opinion is that it will increase small business taxes and as a result hurt small businesses and job creation. Am I looking at this in the wrong way? What are your thoughts on how this will affect those of us setting out to start a new business?
Also, can someone living in a country that has universal healthcare comment on how its implementation has helped or hurt small businesses?
And please lets keep this discussion focused strictly on the impact to small businesses. The other aspects of the bill should be discussed elsewhere.
UPDATE: As I expected, the bill did pass last night.
Health Insurance Jobs USA Government
There is a small business tax credit: http://online.wsj.com/article/BT-CO-20100321-704391.html?mod=WSJ_latestheadlines
"Beginning in 2010, small employersHard to say how much it will pad higher taxes on startups.
can elect a tax credit for 50% of
their employee health care coverage
expenses. Small employers are
generally defined as businesses with
no more than 25 employees."
Unless your small business buys $27k insurance plans, has employees making more than $250k/yr, or does a lot of tanning, there will be no new taxes as a result of this bill. There are some penalties that kick in if you have more than 50 employees and don't offer insurance, but for the most part, small businesses will get tax credits and will have better plans to choose from due to the exchanges. And because individuals will also be able to buy plans without worrying about pre-existing conditions or continuity of coverage, it may fuel a lot of new startups as people can leave their existing jobs without losing healthcare. And as Gary mentioned, there are some tax credits that kick in to help some small businesses offer healthcare.
Here is an overview - if you don't trust the source, you can search and you'll find roughly the same information from the major news organizations.
Fyi, small businesses with fewer than 50 full time employees are exempt from requirements. See "SEC. 4980H. SHARED RESPONSIBILITY FOR EMPLOYERS REGARDING HEALTH COVERAGE." of the bill.
Choose the last one on the list.
Hmmm...these are some interesting posts. I am certainly not an expert on the HC legislation that just passed or the HC debate in general (though I have read quite a bit of material on the subject).
I can speak as an expert on my individual situation. When I left my corporate job and tried to get health care I had very few reasonable options. Signing up as an individual required paying exorbitant fees (on the order of $700+ per month as a single individual in my thirties with no pre-conditions). Signing up as a company owner required my company to be in operation for 6+ months; the problem was that my company hadn't been in operation since I was just leaving my corporate job. Of course Cobra was an option at about $400 per month but that left me with limited flexibility.
When Cobra ended I was able to sign up for individual health care plans at rates that were cheaper than Cobra but those plans required that I had been a Cobra participant (I wonder what would happen for folks who were not coming off of Cobra).
I don't claim to have exhaustively found all possible options in the scenario above (though I did search very diligently and talked to many people). What I can say, is that I find the current situation (what I went through) to be quite daunting as a business owner. To use terms such as "slavery" when describing the recently passed health care legislation seems a bit over the top, no?
Here are some great articles on health care:
It has already passed.
It will clearly help small businesses, but not for 4 more years when all the provisions take effect. Have you ever tried to get health insurance for a small startup? If I have one or two employees it is currently virtually impossible to get group insurance. That means even if I'm willing to pay for the new employee's individual health insurance plan there is no guarantee that employee can get health insurance. So who is going to accept a job at my startup without knowing if they also get health insurance???
You are right to be very concerned. You cannot put the government in charge of nearly 20% of the U.S. economy without severely impacting the free markets. This is a very sad day for capitalism, free markets and personal liberty.
On a practical level, the federal government has just nationalized our health care system with at least a trillion dollar price tag to taxpayers. That means successful small business owners are in the perfect tax bracket to bear the brunt of the responsibility for paying these huge costs (which are most certainly under estimated). Another huge chunk of money to another inefficient government program will limit risk, growth and expansion of business. Especially small business.
Secondly, every US citizen will now be required by law to obtain and maintain certain types of health coverage. Who has the government already decided is obligated to monitor and pay for insurance? (think medicare, medicaid, social security, unemployment insurance, worker comp, employee retraining, etc.) Employers. Who will bear the cost and administrative burden for all these new requirements? Employers. Who can least afford all these regulations. Small Business owners. This is a very bad day for capitalism indeed.
I live in Canada so I can't speak to the situation in the U.S. All I can say is that universal health care is one of those things you will one day wonder how you lived without.
I'm not straight on all the facts as it's difficult to be. It does however seem logical that the government is trying to help the people. Obama seems to be trying to address a need in society. By removing the special interest Health Care comanies. There is a reason why they have so many lobbyist and it's not to help the people. There is no question the rich will be taxed more. In fact Canada has higher income taxes then the U.S.
In Canada we have a "profit sharing" agreement between the provinces for instance BC, AB (oil country), Ontario and sometimes Quebec, are profitable provinces while some years other provinces are as well. Basically money from the big provinces is distributed to the small ones to ensure the same social services in NewFoundLand as you get in Alberta. The reason I bring this up is that when it was brought into place there was outrage. Now it is entrenched in our constitution. Because as a Country we move forward not as individuals.
I think health care reform is a great step for the U.S. on the path of becoming the country it can be.
The prevalence of employer-based health care is a huge impediment to the free market. The fact that employers generally pay some of health care, and more importantly, collect those oh-so-critical "groups" within their walls, greatly increases the barrier of entry for start up companies. It also discourages job mobility. The ways in which these two phenomena hold back enterprise/innovation should require no explanation.
A REAL public option (not that we're getting one) or a national exchange that gives individuals/small groups options, would go a long way to remedy this.