The Health Care bill currently winding it’s way through Congress seems to have everything in it, but a solution to health care costs.
I’m actually not against Health Care reform, per se. But I am against certain proposed provisions, and this one caught my attention.
According to “Subtitle D. Shared Responsibility for Health Care”, the health care bill will require any business with 25 or more employees to purchase health insurance for their employees. If they don’t provide health insurance, they will be fined $ 750.00 per employee, per year, for full time employees, and half that amount for part-time employees. These amounts will increase in future years.
This is essentially an anti-small business provision that, alone, should kill this bill. Every single person who owns, or is employed by a small business, will be detrimentally affected if this bill passes with this provision in tact.
Suppose that you own a small business that is successful and growing. You started-off with one employee, and hired one employee at a time to support your growth. You had to squeeze your profit, or borrow money to hire each employee, and then worked hard to make that gamble pay-off in higher profits. Now, you have 24 employees.
Now you want to hire yet one more employee to continue that growth, but, now that you have 25 employees, you will be required to provide health insurance to all 25 employees, or face a hefty fine.
As proposed, a small business will be fined $ 750 per employee, per year. So, the fine for your company is 25 employees X $ 750.00 = $ 18,750.00/year.
So, that one new employee will cost you $ 18,750.00, off the top of your expansion capital, and could stifle or, quite possibly, kill your ability to grow. There is no way that hiring a single employee can gain you enough new business to make a (gross) profit that will even cover the cost of the fine ($ 18,750.00), let alone make a net profit. Most small businesses simply do no have that kind of earning power; they need to grow in order to attain more earning power.
If you were a small business person, what would you do ? If you could magically increase your profit by over $ 18.750.00, overnight, then I suppose you could absorb the added costs of the health insurance fine. But that is just wishful thinking unless you are, perhaps, a miner who has discovered a new vein of gold.
Most small businesses grow in steps, not in leaps. They work hard, and leverage their product, or service, until, eventually they become a larger business.
And what if you are an employee of a growing small business ? Your career, and your livelihood are stunted, and stopped because the business you work for is stunted, and stopped from growing.
This provision is a hidden cost of the Health Care plan that needs to be considered, and included in the cost of the overall plan. Consumers will pay more for goods and services because big business will set the prices, with impunity, in monopoly-like fashion, and more importantly, less jobs will be created.
How does it help the average American if their savings in health care costs are simply shifted to a different products, or services, or, worse yet, if they are unemployed because small business is stifled ?
This health care bill will cut small businesses off at the knees. It will make it very hard to grow beyond 24 employees.
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And what is the point of exempting small businesses with less than 25 employees from providing health insurance ? A primary part of the Health Care sales pitch is that it will provide insurance to those 44 million people who are currently not insured ? It seems like a whole lotta people are still going to be without health insurance.
How will this health care bill cover those 44 million uninsured Americans if it includes all these exemptions ? It seems like there is a little double-speak going on here; the proponents of the bill want to provide health insurance to those 44 million uninsured, but not to those employees who work for small businesses with less than 25 employees.
It makes no sense.
If I were a more cynical person, I would almost believe that this section of the bill was sponsored by big business, with the specific purpose of stifling small business growth. It doesn’t pass the smell test, for sure.
But, I’m not a cynic. I’d rather think that whomever suggested this section didn’t think it through.
Whether the health care bill, as a whole, passes, or not, I hope this section is removed.
And that is just my opinion.
Spence Holly
www.angrycalifornian.com
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OTHER RESOURCES
Click here to read a very good, and expanded analysis of this provision of the health care plan.
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For your reference: the actual text of the
Subtitle D. Shared Responsibility for Health Care (partial, only)
Shared Responsibility of Employer. Employers with more than 25 employees who do not offer qualifying coverage (as determined in section 3103) or who pay less than 60 percent of their employees’ monthly premiums are subject to a $750 annual fee per uninsured full-time employees and $375 per uninsured part-time employees. For employers subject to the assessment, the first 25 workers will be exempted. Beginning in 2013, the penalty amounts will be adjusted using the Consumer Price Index for urban consumers. Employers with 25 or fewer employees are exempt from penalties and are eligible for program credits in section 3112. (§ 3115)”
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Click here to read the proposed Health Care. This is a searchable PDF.
