I know that healthcare is a big issue for small business. I’ve walked in those shoes. And I’ll admit I haven’t read the bills that are pending in the House and the Senate. But folks, we have to solve this problem — some way, some how. We can’t keep putting it off. It will only get worse.
I think it’s fair to say that small business shouldn’t shoulder the entire burden, but I also think we have some responsibility to help resolve the situation. I don’t want our lawmakers to shove through legislation that turns out to be a bunch of sour apples, and I’m hopeful they’ll set politics aside to come up with a good plan. Is that too “pie in the sky?” I hope not. But I think we need to keep an open mind. And remember, we can always respond with our votes.
I found some interesting thoughts in results from a survey that SurePayroll conducted this week. The purpose of the survey of small business owners was to get their thoughts on the new House bill proposing a “pay or play” option that offers business owners with payrolls exceeding $400,000 two choices:
1. Either pay part of the healthcare premium for all full-time employees, or
2. Pay an 8% penalty.
According to the survey, nearly 3 out of 4 respondents (72%) said they do not support the legislation. When asked to explain why, here’s what some business owners said according to the press release:
- Many small businesses simply can’t afford any more costs in this economy. They will have to reduce employees or reduce salaries and wages. Even though 8% doesn’t seem like a lot, it may be the tipping point for businesses on the edge. Employer-paid health insurance has to stop and health insurance has to revert to an individual expense or costs will never come under control.
- It will be catastrophic. If I were told I had to provide health insurance for my employees, I would immediately terminate half of my staff to cover the expenses of the others.
- The money can’t be generated out of thin air – it will have to come out of wages. In the end, there is only a fixed amount of pie to go around for wages and compensation, no matter how you slice it. I can see scenarios where companies will be forced out of business, if there is no ability to cut wages. I don’t see how anyone is helped by that.
- This is not a problem to be dumped on small businesses. The problem is too big. Health benefits should be taxed as income, because that’s what they are. Do that and then you’ll really see motivated health reform.
Still, some respondents had positive things to say about the proposed reform:
- Paying a portion of employees’ health care premiums should be an assumed expense. If you can afford over 400k for annual payroll, you can certainly chip in on premiums. If you aren’t already or refuse to, you deserve to be penalized financially.
- Done correctly, it will level the playing field for small businesses to compete for workers who are forced to go where the benefits are. It will be good for small businesses.
- It might be difficult at first, but businesses will adjust. Right now, healthcare is indirectly costing all of us a lot of money, small businesses included. In the end, I believe it will be more economical to have universal healthcare implemented.
Yes, it will definitely impact small business cash flow. But it will also make small businesses attractive to some of the better talent out there in the marketplace. I’m not sure what the answer is, but I’m looking forward to getting something on the table so we can move forward.