Okay...what will prevent a business...

[Corruptbuddha]

...from dropping its healthcare programs and paying the penalties?

Penalty - $2000 per worker.

Premium for workers (on average) = $4000 SINGLE $11000 Family.

 

[NightSwimmer]

I get to be part of the "group". That's a good thing for me.

Gotta be willing to pay your help, anyway -- especially if you need good help.

 

[gabriel]

simple. raise the penalty

 

[connieb]

Nothing. And, I think we are going to see a fair amount of that start happening. And/Or its only a matter of time until someone figures out how to reorganize something so that the management employees are still covered - cause you want to be able to attract that talent, but the rank and file employees will not be. There are already some talk of reviving the idea of employee leasing. It is a practice that has fallen by the wayside in recent years, but may be a way of tiering benefits and there has been a renewed interest - particularly in industries like construciton where you have a fair amount of turnover and a much larger portion of the workforce who can not afford benefits.

connie

 

[Corruptbuddha]

I think we'll see a huge uptick in contracting.

You get good talent without all the worries.

 

[connieb]

The advantage in Contracting is the benefits in the majority of firms were already fairly dismal anyway. Many companies don't even offer paid days off for the field personnel and in some cases if they do its only like a week. I have clients who have been begging the field to sign up for HI because they were having trouble meeting the minimum participation required by the insurer as it was. So, they will likely just give raises to those they want to keep happy to go buy their own and try to reconfigure their "full" time staffing etc to avoid penalties as much as they can, and just pay what ones they can't.

connie

 

[bdtex]

The penalties wouldn't be a tax deductible business expense. Right?

 

[Corruptbuddha]

I made a ton of GOOD money as a contractor years ago..but the kick was that I had to pay for my own healthcare. Wasn't too bad in the 90's..I REALLY wouldn't want to do it now with Obamacare.

 

[Corruptbuddha]

The penalties wouldn't be a tax deductible business expense. Right?

I don't think so...but I honestly can't tell you yes or no.

(Do you know?)

 

[bdtex]

No I don't. I know employee health insurance is a tax deductible business expense.

 

[connieb]

Most of the stuff I have seen is that it is not going to be tax deductible. But, there are going to be some expected challenges to that in the tax court. At least that is the scuttlebut about it right now in industry. We are referring these to these as penalties. But, in reality if on the individual side, the amount they have to pay for not having coverage is a tax - then it will be considered such on the business side too. While federal income taxes are not tax deductible, others are such as federal highway use taxes, payroll taxes, state income taxes, etc. So, it will be interesting to see how this will play out.

My guess is ultimately it will be ruled as something that can be tax deductible. But, it is not set to be such right now.

That will not stop companies though from doing what they can to get their employee numbers down, etc.

connie

 

[Corruptbuddha]

My hunch is that it's going to hurt, rather than help, business and therefore...employment.

 

[bdtex]

My sense is that if employers dropped the insurance and paid the employees' penalties it would be treated as taxable income to the employee. Either way,the employee will be without insurance. If the cost of individual policies with comparable coverage goes down,there won't be the need for employer provided health insurance.

 

[JuliefromOhio]

...from dropping its healthcare programs and paying the penalties?

Penalty - $2000 per worker.

Premium for workers (on average) = $4000 SINGLE $11000 Family.

if businesses were smart, they'd join the push for universal health care.

 

[connieb]

I agree. I already have clients trying who are on the cusps of the 50 employee mark and figuring what they need to do to keep that number below the 50. There is no doubt about it but that is going to mean reducing their workforce. They are weighing things like split workweeks to keep people below 30 hours and using temp labor services more.

It is NOT just the cost of the insurance. But it is the internal cost of managing that plan. We are talking about companies who have one bookkeeper. Not an entire staff or office or HR staff. The calculations for what is "affordable" are very difficult. How are you supposed to know what 'household" income is - and calculate your % relative to your employees household income if you have no idea if their spouse works or not? Just the adding all the new people, etc could be difficult and a paperwork nightmare. And, we aren't talking tiny companies here. You can do 10 million a year in volume and have fewer than 50 employees and be a "small" business in this industry.

I think what we have seen since the recession anyway is a culling the herd for the average worker. I have clients that are trying to fill positions and won't hire someone off of unemployment because they are of the opinion that if you were good - you likely had a job already. I think that is only going to get worse with this. It really will become more of trying to keep your best and brightest and consider anyone else expendable.

 

[NightSwimmer]

if businesses were smart, they'd join the push for universal health care.

Yep. Private, for-profit insurance is the real problem here, and it was a problem long before Barack Obama had ever been heard of.

 

[fairsheet]

Oh for chrissakes everyone and grow up already!!!

It makes no godamned SENSE that a company would DROP it's existing healthcare benefit, and choose to pay a penalty. For after all, why in the hell did they offer that benefit in the FIRST place -BEFORE the penalty?

Good God....some of you seem to revel in playing the sap.

 

[connieb]

Well, it may not make sense to you, but I can assure you it is being considered. There are whole seminars devoted to avoiding the pitfalls of the ACA and how you can manage your business to not have to comply or have it affect your bottom line the least.

connie

 

[fairsheet]

Well, it may not make sense to you, but I can assure you it is being considered. There are whole seminars devoted to avoiding the pitfalls of the ACA and how you can manage your business to not have to comply or have it affect your bottom line the least.

connie

You say it's "being considered", but you don't say why the hell someone would "consider it". A whole lot of Fox/GOPs seem convinced that real money acts on "feelings" and that real money acts out of poltical pique. Alas, real money wouldn't BE really money, if that's how it made its decisions.

 

[connieb]

It is being considered because people are considering the overall expense they will incur compared to the cost of the benefit. I don't know why anyone would make that choice based on a feeling alone. But, people are actually weighing the costs of non-compliance. Their options as far as restructuring their businesses to decrease the number of employees, the internal costs of compliance, etc. That is what good business owners do. The run the numbers. I don't think anyone should make this choice out of political pique, that would be exceedingly stupid. But, it will cost businesses money to comply. One way or the other - and I would expect them to make an intelligent choice based on how the numbers fall out and the expected ramifications for their business and staffing needs.

connie