Sponsored by Oregon Business

Obamacare is for business, not for Congress

| Print |  Email
Opinion
Thursday, August 29, 2013

BY JAN MEEKCOMS | OP-ED CONTRIBUTOR

08.29.13 Blog USHealthEarlier this month, President Obama took the unusual step of involving himself in an administrative matter that would have been otherwise handled by people many levels below the Oval Office. He personally approved a “solution” to a “problem” affecting health insurance benefits for members of Congress and their staffs.

The problem was Obamacare, and the solution was to declare that the policymakers and staffers who pushed the law through Congress could still receive ample federal health insurance subsidies that were supposedly reserved for lower-income families.

It is a perfect irony that so many of the same lawmakers and staffers who forced Obamacare on the rest of us, when faced with the having to pay for it, decided that it might not be worth the cost.

Most of us aren’t so lucky. This includes those of us in the small-business community who will be forced to face and pay for some of the law’s most complex and expensive provisions. And unlike Congress, we won’t be granted a reprieve.

The law requires all employers with 50 full-time equivalent workers to offer a government-approved, high-end insurance plan or pay a fine, which for many will be the cheaper option. When you’re struggling to turn a profit each month, the latter may be the more prudent long-term decision.

Other options that small-business owners are considering include cutting their workforce to below 50, or cutting back hours so more workers will be considered part-time, although Obamacare doesn’t make it that simple, because it defines full-time worker as those clocking in at 30 hours a week. As employers adjust by cutting hours and cutting workers, it is businesses and families that ultimately suffer.

Smaller businesses, too, are subject to a litany of new taxes, mandates and regulations that will cost even ones that employ only a handful of people thousands in compliance costs—not to mention the costs of aspirin for all the headaches employers can expect. One of the largest tax increases in the law, the Health Insurance Tax, will predominantly hit employers and employees in the small-business community.

Larger businesses are acting preemptively to avoid the looming costs of the law. The news is filled with stories about companies shedding workers, cutting hours and slashing benefits. UPS, for example, recently announced that because of the ACA, it would cancel coverage for 15,000 spouses. Forever 21, a clothing retailer, announced plans to eliminate most of its full-time workforce. Restaurants, hospitals, local governments and colleges are taking similar steps.

Could this be the future, a mostly part-time economy in which good benefits are rare? Economists can’t agree, of course, but recent jobs reports show a pronounced increase in part-time employment and very little growth in full-time jobs.

Of equal concern is the individual mandate, which will impact every American who buys insurance in the individual market—including a vast majority of small-business owners. The individual mandate—a tax, as was determined by the Supreme Court last year—takes effect on Jan. 1, 2014. For many, it will mean higher premiums or fines. There are no exemptions or delays.

And on October 1, in compliance with another Obamacare requirement that each state have a health-insurance exchange, Cover Oregon will open for business. Although small business hopes it will offer easy access, choice and affordability while becoming financially self-sustaining, that’s a pretty tall order, especially given the difficulties other components of the law have had.

Obamacare is the law of unintended consequences. Despite its name, the Affordable Care Act is raising the cost of insurance for almost everyone who pays for it now. It threatens full-time work that is the pathway to the middle class. But perhaps most dangerously for the U.S. economy, the law creates obstacles for small-business owners no matter which way they turn.

Hiring more people would trigger massive new costs. So they’re in a holding pattern, trying somehow to compete without growing.

Jan Meekcoms is Oregon state director for the National Federation of Independent Business, America’s largest small-business association.

 

Comments   

 
Guest
0 #1 RunFreeGuest 2013-08-29 18:35:28
Since when is 30 hours a week considered "full-time"? This, and the entire Affordable Care Act, is a bad precedent to set on so many levels.
Quote | Report to administrator
 
 
Guest
+1 #2 managerGuest 2013-08-29 18:41:22
and your solution is?
Quote | Report to administrator
 
 
Guest
+1 #3 Bill, MDGuest 2013-08-29 19:36:30
UPS is using Obamacare as an excuse for cuts it probably planned to make anyways.

I understand your concerns about the cost of health insurance for the employees of small business. But what is the alternative? You talk as if this is some sort of expense for nothing, but it is providing people health insurance. How else do you plan to insure people? A single-payer plan like Medicare?
Quote | Report to administrator
 

More Articles

Finding a Balance

Contributed Blogs
Thursday, January 29, 2015
012915-passinvst-thumbBY JASON NORRIS | OB GUEST BLOGGER

Active vs. passive investing: what you need to know.


Read more...

The Road to Reinvention

April 2015
Friday, March 27, 2015
BY AMY MILSHTEIN

Damian Smith bets on changing himself — and Portland — through consulting.


Read more...

Downtime with the executive director of Greater Portland Inc.

April 2015
Thursday, March 26, 2015

Janet LaBar, Executive director, Greater Portland Inc.


Read more...

Green Rush: Cashing in on legal marijuana

March 2015
Friday, February 20, 2015
BY COURTNEY SHERWOOD | OB CONTRIBUTOR

Marijuana is big business in Oregon, and it’s about to get bigger.


Read more...

Cache and Curry

March 2015
Monday, February 23, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR

Power Lunch at Swagat in Hillsboro.


Read more...

Uncertainty about convention center hotel could cost Portland an NBA All-Star Game

The Latest
Wednesday, February 18, 2015
463545460BY JACOB PALMER | OB DIGITAL NEWS EDITOR

NBA commissioner: "I would love to end up having an All-Star Game in Portland. It's really just a function of ensuring that we can fit in town."


Read more...

Announcing the date of the 100 Best Green Workplaces in Oregon event

News
Friday, March 20, 2015
OBM-100-best-Green-logo-2015-250pxwBY OB STAFF

Join us to celebrate and network with Oregon’s best green workplaces!


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS