Small-business owners scramble to avoid cost hikes related to 'Obamacare'

Thousands of small businesses around the U.S. are racing to renew their health insurance policies Dec. 1 to beat large premium increases their brokers say will hit them Jan. 1 when the Affordable Care Act takes full effect.

Some health insurance brokers also say 2014 may be the last year many of the companies even offer health insurance.

Insurance brokers from several states told USA Today that 60% to 80% of their small-business clients — those with 50 employees or fewer — are renewing their policies early to skirt the law. Companies with more than 50 employees aren't allowed to adjust their renewal dates.

Many companies are still waiting to hear what rates they'll be facing in 2014, as state insurance commissioners are backlogged with tasks related to compliance with the health-care law, known as Obamacare.

The National Federation of Independent Business estimates 42% of the at least 7 million small businesses with 50 or fewer employees offer health insurance. On Friday, the group released a survey in which 64% of 921 small-business owners and operators reported they pay more for insurance premiums per employee in 2013 than they did in 2012.

Beginning this past summer, insurance companies warned brokers and companies that rates could rise dramatically because of the ACA, and some of these agents say they are seeing increases of 30% to even 100% in premiums, especially for businesses that have young workforces. That's because companies will no longer be able to charge older people more than three times they do younger ones. In some states, there is no limit on how much more they can charge older employees than younger ones, and it can be five times more in some states.

Via: The Town Talk

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Raising the Minimum Wage will Hurt Consumers - Your Bottom Line

August 28, 2013 – Obama’s proposal to raise minimum wage will actually cause problems for small business owners and the nation’s young job-seekers, says NFIB’s chief economist Bill Dunkelberg.

The plan to raise the minimum wage from the current $7.25 to $9 per hour is part of an effort to increase consumer wealth, thus increasing disposable income and consumer spending. In theory, it sounds like a good way to boost the economy.

But is this change really a victory for the workforce?

According to Dunkelberg, an increase in the minimum wage would result in the following negative outcomes:
 

• Higher unemployment: Business owners will have to cut their employees to be able to pay those that remain the higher wage. Furthermore, the higher minimum wage will be an incentive for owners to find ways to permanently reduce labor via technology.
• Reduced job opportunities for teenagers and new workers: Fewer minimum wage jobs available will make it harder for the younger work set to find jobs, denying them a “stepping stone” into the workforce and the chance to learn invaluable skills.
• Reduced customer spending: the high cost for labor will be passed to the customers via the price for goods and services. As prices increase, consumers buy less.
• Accordion Effect: the entire wage structure will be affected, causing an overall loss of wealth among working consumers.

These arguments are rooted in what Dunkelberg calls an "irrefutable law of economics": "The higher the price of anything, the less will be taken—this applies to labor as well as goods and services," Dunkelberg said.

About Your Bottom Line with Bill Dunkelberg

NFIB's web series, Your Bottom Line With Bill Dunkelberg, helps small business owners learn more about what drives the economy and how economic issues affect their businesses. William Dunkelberg, NFIB's chief economist and one of the nation's top experts on small business.

Via: NFIB

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Poll: Small businesses, manufacturers have bleak outlook on US economy

A poll released this week by the National Association of Manufacturers and the National Federation of Independent Business (NFIB) shows that a majority of small business owners and manufacturers think the U.S. business environment is getting progressively worse.

The national survey, conducted between Aug. 13 and Sept. 4, interviewed 800 small business owners and manufacturers and found that 69 percent of them think President Barack Obama’s policies have hurt American businesses and manufacturers, and 55 percent would not start a business today given the current environment.

“That’s something I think for us is not only alarming but really disappointing, because these are the risk takers in the economy,” NFIB vice president of public policy Brad Close told The Daily Caller. “I think that’s a red flag and it should be very troubling to folks, that entrepreneurs are saying they would not do what they did 10, 15, 20 years ago today if they had the choice.”

The survey showed that small business owners and manufacturers think federal regulations, taxes, government spending and the costs of health insurance and energy are the main causes of slow economic growth.

“What we’re up against is a tremendous amount of regulations,” Gordon Hunt, president and chief marketing officer of Illuminating Technologies, told TheDC. “We don’t want airplanes falling out of the sky, but we probably don’t need to know what size the cup can be that you serve Coke to us in the plane.”

Hunt said his company has covered 100 percent of their employees’ health insurance since the day they started, but they may not be able to continue doing that in the face of Obamacare.

“We’re really doing everything we can to keep [our employees] covered, but if our competition decides they’re better off paying a small penalty versus a higher cost of insurance for their employees, they’re going to have a competitive advantage over us,” Hunt said.

Via: Daily Caller

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OBAMACARE REDEFINES 'FULL TIME' EMPLOYMENT AS 30 HOURS A WEEK

A year and a half after the passage of the Patient Protection and Affordable Care Act, bureaucrats at the IRS and Health and Human Services issued an 18-page report outlining new regulations that will dramatically increase health care costs for small and large businesses alike. 

The regulations, written by an IRS attorney, arbitrarily redefine "full time employee" as someone who works 30 hours a week for a business. Traditionally, most private businesses have defined "full time employee" as someone who works 40 hours a week. With this new regulation, the federal government is now removing the right of businesses to define "full time employee" as they deem appropriate for their unique conditions.

Kevin Kuhlman, Manager of Legislative Affairs at the National Federal of Independent Business, the plaintiff in the NFIB v. Sebelius Supreme Court decision, was not pleased with the new regulations:

This is the latest in what promises to be a nearly-endless amount of regulatory duct-tape, struggling to hold together a bad law that is nearly impossible to administer. The new regulation attempting to define a full-time employee is a classic by-product of the health-care law – more regulation, more red tape, more paperwork. The repercussions of this law and its regulatory jerry-rigging, for the small-business community, are endless.

The Washington Examiner noted that the new regulations will hit small businesses especially hard: 

The IRS rule is key because companies with more than 50 full-time employees must provide health insurance under Obamacare, or be fined. Business groups have been warning that small companies might try to replace full-time workers with part-time help to avoid being forced to offer health insurance in 2014, but the 30-hour full-time definition is likely to undermine those plans.

Via: Breitbart

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