There has been a lot of talk about Obamacare and the changes to the law on the news lately. Here is my situation as a business owner, and as a parent of a child with a preexisting condition.
Because of the preexisting health concerns of my child, we could not get our own coverage in the past. We had to be part of a group plan, so we decided to purchase group insurance for the company, which meant that we would pay 50% of the premiums for our staff. That 50% was then a tax credit to us. So if we owed $10k in taxes each month, and paid $8k in staff insurance premiums, we now only owed $2k in taxes. My accountant has informed me that this tax credit has been eliminated under Obamacare. This means that next year, we will see an $8k per month increase in our taxes.
Now we can get our family insurance with a $0 deductible for a much lower rate than paying the monthly premiums for our employees through (I hate to say it) healthcare.gov by purchasing a "gold" plan. If we attempt to obtain coverage through the company, we will still have to maintain the 50% payment of our employees, the premiums for which will be increasing our half by an additional $2K a month. For this amount, we will have a $2K deductible, and we will lose that tax credit. This means that our insurance expenses and taxes will increase to $218,000 per year if we continue providing insurance for our staff. This level of expense is just not sustainable. For this reason, we will be dropping the insurance that we offer as a small business to our employees, will get our own policy, and direct our staff to the healthcare.gov site.
This is just the insurance view. There is more to Obamacare that most do not realize. It has forced many in my industry to close due to the cost of compliance with the regulations put on food supply operators for calorie and nutrition infomation disclosure.
My opinion is mixed. The preexisting condition of my child is now moot. The cost to me appears to be cancelled out so far with lower deductibles. However, it is forcing my staff to now be transferred onto the health care exchanges for insurance, and they will now have to pay 100% of their premiums. Due to the added taxes and expenses associated with the compliance with this law, we are not in a position to give any of you a raise to offset the additional costs. Depending on how my taxes work out at the end of the year, there is a distinct possibility that we will have to scale back or even sell out our remaining contracts and lay off our entire staff. We will inform you as soon as we know more.
Wednesday, November 13, 2013
Elections have consequences
My brother is a business owner and has a few employees. He is still a small enough company that his employees are like family. His son developed a significant health issue when he was only two years old, and needs to have surgery every 8 weeks as a result. My brother had to send this letter out to his employees today: