The presidential debates began this week, and both candidates had a lot to say on the popular healthcare topic. As a business owner, you had better be paying attention to the Affordable Care Act (ACA) and the varying deadlines and requirements that affect your profits or employees (and their retention). It’s time to understand the impact it has on your growth potential, job creation and your future health.
While Republican candidate Mitt Romney is looking for a repeal of the ACA, more commonly known as “ObamaCare,” Obama will continue to ensure the ACA reform is completely rolled out over the next couple of years.
As a business owner, this is what it comes down to:
- How will costs associated with providing healthcare to employees affect my business, my employees and my bottom line?
- How will these costs affect retention and the hiring of new employees?
- What are the effects on your profitability?
Issue: How much does the current healthcare situation cost your business and what will it mean in the future?
Impact: The National Federation of Independent Businesses (NFIB) states that rising healthcare costs are the #1 problem for small businesses. Small businesses are dropping insurance because they can’t afford it. Sure, some would say there are tax credits available – but you have to qualify and unfortunately, many small businesses don’t meet the requirements; less than 25 employees and average salaries of $50k or less. So, is it better to pay the penalty for not providing healthcare? Wages become stagnant to cover the cost of healthcare (if you choose to provide it), employees become disgruntled, health issues may deteriorate; choices are limited and you now have a looming budget deficit. While healthcare reform is unveiling itself, what is the true impact on small businesses and approximately 60 million people employed by small businesses?
Both candidates say their goal is to keep costs down and have affordable plans for families, but at what costs? Some groups (Congressional Budget Office) have estimated Obama’s healthcare reform could reduce the deficit by $143 billion over 10 years (but opponents and other experts state that the reductions are unlikely to pass due to political reasons). However, this means cuts in Medicare to help pay for the cost of covering all citizens with healthcare (and remember, Medicare is what most retirees automatically use when they hit retirement at the age of 65 – and for younger generations it will much later than the age of 65). Additionally, an increase in withholding percentages for individuals earning over $200,000 ($250,000 for married couples filing jointly) by .9%, and an assessment on unearned income (capital gains, dividends, interest…) of 3.8% on net investment income combine to be the Affordable Care Act’s single largest funding sources (aka tax increases) and effective in 2013.
In 2014 the individual mandate (now known as a new tax), state exchanges, and employer penalties (Play or Pay) go into effect – and less money in your business means fewer people hired, fewer people covered by employer health insurance and more people moving to exchanges causing healthcare benefits to increase in costs and even fewer choices in doctors.
When making your choice at the polls in just 5 weeks – who do you want to control your healthcare? How will it be paid for? What are the long-term effects and reality of it actually working? How will it affect your future healthcare offerings and insurance? Get to know your candidates and the huge impact they will have on your businesses future.