Healthcare Reform - A Pain In Your Bottom Line!

This month the U.S. Supreme Court will deliver a verdict on the repeal of the Affordable Care Act. Experts are advising that, because the legislation is so complex, repealing it will prove complex and difficult whether it is overturned entirely or in part. As a result, healthcare reform may not settle down for the foreseeable future.

For small businesses, the consequences of reforming the law, repealing the law or upholding the law all require company owners and managers to stay informed and make policy changes that benefit the company and employees in a timely manner. Staying in compliance with healthcare law can distract employers from core business.

Healthcare Reform, Columbus Ohio

Advocates and opponents of the Act agree that small businesses create job growth and innovation and are an important part of the U.S. economy. Everyone agrees that small businesses have been severely disadvantaged by the rising cost of insurance. According to the National Federation of Small Business (NFIB), for more than two decades, small businesses have cited rising health insurance costs as their No. 1 problem. Rising healthcare costs, they say, explain why their employees’ wages have stagnated.

Advocates of the new law argue that the prior healthcare system imposed heavy “taxes” on small businesses because they had higher broker fees, fixed administrative costs and adverse selection. As a result, small businesses may have paid up to 18 percent more for healthcare than larger companies. And advocates claim that much of this cost has been passed on to employees in the form of lower wages. As a result, small businesses have not been able to attract the best workers or compete in a fair market place.

More importantly, because of the higher health care costs, many small businesses simply do not offer health insurance for their employees. Only 49 percent of firms with three to nine workers currently offer any type of insurance for workers. And that percentage is declining.

Advocates say that many small businesses would be able to alleviate their higher costs and encourage coverage under the new healthcare law. A tax credit would provide a break for smaller companies that qualify and an “insurance exchange” program would allow companies to choose from a multitude of plans. Those plans would provide better coverage at lower cost.

Opponents of the new law disagree. Some argue that while healthcare reform is needed to help small business provide affordable insurance, the new law does not address the issue properly. According to NFIB, the U.S. Tax Code favors employer-sponsored insurance and this can discourage individual purchases. They argue that individual purchases of insurance should be encouraged, thus, taking insurance out of the employment equation.

Another argument against the new law is the tax treatment of insurance that can be purchased by the self-employed. Some argue that it is currently unfair and therefore discourages self-employment and entrepreneurship. Continuing to focus on reform of insurance through businesses and corporations, rather than on availability of insurance programs for individuals to purchase on their own can be counterproductive.

It’s a divisive issue, but all agree that small business is the cornerstone of the American dream.

“At the end of the day, I don’t think any of the major players in the health insurance industry or the provider community really wants to see the whole thing overturned,” said Christine Ferguson, a health policy expert now at George Washington University. “Even though this is not the most ideal solution, at least it is moving us forward, and it does infuse some money into the system for coverage.”

It is unclear how the justices will rule on the central issue of whether government can require individuals to have health insurance and fine them if they don’t.

“In the meantime, it is critical that small business owners and managers stay informed and in compliance with the current laws and regulations concerning healthcare,” says business expert Dan Robbins at Horizon Business Solutions.

If you need help understanding current healthcare regulations or have other questions regarding business operations, call the experts at Horizon at 614-577-1700 or check out their website at www.horizonbiz.com today.

Kelli Minor Horne | 06/19/2012

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Healthcare Reform - A Pain In Your Bottom Line!