I am a small business owner who founded and grew a marketing, development and technology firm from one person into a global operation. It has not been easy.
Thursday’s Supreme Court decision jeopardizes two decades of hard work and dedication. Five justices concluded that, in simple terms, I no longer can decide what I can and cannot afford for my business or our employees.
In the last decade, the rising cost of a full-benefits package for employees has affected all companies. To attract the best and brightest, we have chosen — but have not been coerced — to provide a competitive benefits package. This has become much more difficult with the rising costs of health care, but we have been fortunate. Today’s ruling, coupled with our country’s marginal economy and the marketing industry as a whole, affects not only my company’s future, but that of all similarly-situated small businesses.
Currently, I offer a Blue Choice Health Plan to employees. They are given the option to take the package or not, depending on their needs and their current situations. Under the Affordable Care Act (ACA), any business which employs more than 50 full-time workers will be responsible for their health insurance or penalized $2,000 for each worker. Those businesses with fewer than 50 employees, like mine, would fall into the small business category.
There are three options for these companies: they may buy the health plan offered in the state exchange, opt to maintain their current plan or choose not to provide any benefits, leaving the responsibility to their employees to acquire health insurance on their own.
The ramifications of this mandate are far-reaching for small businesses like mine. Suffice it to say, any strategic advantage of planning, shopping benefits and saving for employee health benefits (as has been our past practice) is made obsolete by the mandate. Any competitive edge that a business may have had by virtue of hard work and agility simply goes away. If the employer buys insurance, as is the first option, the costs associated through the state exchange are still not known.
By opting to maintain our current plan, we face the prospect of higher costs, (as plans adjust to cover the costs of a riskier population and provide mandatory new services). What is known is that benefit packages as we know them will be forced to change and costs of insurance in general are predicted to rise.
The last option is to provide no insurance and forego past promises and practices that built our organization. This option, while perhaps the best financial course of action, is untenable.
From a corporate “growth” perspective, the mandate has a chilling effect. A business like mine, which is on the cusp of a 50-person trajectory, will be forced to stop growing at 49 employees. While I have always espoused the belief that we will hire the best, brightest and most innovative people we can find, today’s decision forces us to stop hiring, based on an arbitrary number of 50. We will be forced to reevaluate full-time positions and scale some back to part-time.
We are entering an era of higher taxes in an already tough economy. This year alone health costs have accounted for nearly a third of all businesses’ expenses. These costs do not include the additional taxes that ACA will implement. Under the ACA, from 2011 to 2018, changes in the tax code will account for nearly $503 billion in additional tax revenue. This is not a savings; these are taxes being put on business owners and citizens to offset the costs of this bill. Spending on health care is expected to grow at a rate of 5.7 percent annually over the next 10 years. According to a CMS study, this spending will accelerate at a rate of 0.9 percent more than our GDP growth. Furthermore, the influx of regulations that both large and small businesses now must comply with under this law only exacerbate an already tight bottom-line.
Even though government is becoming increasingly intrusive, Americans still have the responsibility to voice our beliefs. The health care costs continue to add up; the unemployment numbers continue to grow. We must fully repeal the Affordable Care Act.
