The costs of Obamacare are staggering and will be devastating to small businesses in America. The initial estimates have risen from zero to 2.7 trillion dollars over the last two years. This quote is from the non-partisan Congressional Budget Office. The actual costs will be much higher by the time Obamacare is implemented.
The real problem is how Obamacare will affect small businesses and our entire healthcare system. Starting in 2014, small businesses with over 50 full time employees will have to pay a penalty if they do not pay for employee insurance at the percentages mandated by the government. They are not allowed to adjust wages to compensate for this – so employers three choices are: reduced profits, pay the penalty and drop current insurance coverage, or lower the number of full time employees to below 50.
If a company already has below 50 employees, it is not currently affected by the Affordable Care Act. Those companies will be watching their growth to stay under the magic number of 50 full time employees to avoid the mandates and penalties. How will this affect growth in this sector of business?
Several recent studies show that over 57% of small businesses will drop their insurance coverage and pay the $2,000 per employee penalty (Zenergy Health Solutions). This will save the small business money but will hurt employees, while shifting additional cost to taxpayers. Employees will be forced to go into the federal or state insurance exchanges (only 15 states have opted in to the mandated exchanges so far, so the other 35 will be federal exchanges). Although this insurance will be partially subsidized from the penalties employers pay, the cost will still be much higher than the share employees were paying with their employer-based insurance. The result will be higher costs to employees, and additional expense for the federal government.
Another 24% of small businesses will reduce their number of full time employees to below 50, to avoid the Obamacare mandates (KaMedData). This will be done by switching employees to part time, changing the status of employees to independent contractors, splitting companies up into smaller entities, or just firing employees or not hiring. This is especially true in the health club, restaurant, and small retail industries. The overall result is lower employment, higher insurance costs to employees, and less efficiency and profit in small business, which will suppress employment even further. Not to mention the additional strain on the federal budget.
These are very difficult decisions to make for small business owners but the situation was forced upon them. Drastically lower your profits or change your company and employees so you can stay in business and maintain some profit. If you choose one of the above options you will probably stay in business but lose some key employees which will also hurt business. If you want to maintain your benefits and comply with Obamacare, which is now the law of the land there is an alternative. If employers can maintain or even better, improve the health of their employees they may be able to lower their insurance costs per employee by 9% or more. The best method of treating disease and sickness is to prevent them before they occur. This can be done by eating all natural foods, proper nutrition, drinking enough water, getting 7-8 hours of sleep per day, keeping our weight down, and exercise.
In fact, the Centers for Disease Control and Prevention (CDC) reported that you can lower your risk of contracting a major disease (cancer, heart disease, diabetes, arthritis, etc.) by 80% with these simple lifestyle changes. There are several good health and wellness programs that work towards preventing disease and maintaining good health. The one that I helped to develop is Green Box Foods, and the results have been excellent. The health and wellness of employees has increased and insurance costs have actually gone down. In this platform employees can take health assessments, plan and track a diet, plan and track a fitness routine, learn about hundreds of healthy recipes, learn about how proper nutrition and exercise effects all the major diseases and even speak with Doctors, nurses, dietitians and fitness experts. More information can be found at www.GreenBoxFoods.com.
The only defense against Obamacare’s negative consequences is to stay healthy. The development of employer based nutritional wellness programs is the most efficient and cost effective way to do so.
This is a preview to an article which will be published in HSA Finder Magazine.
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