Healthy Living: Local News
What health care reform means for small business
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Story Updated: Jul 27, 2011
ANCHORAGE, Alaska (KTVA-CBS 11 News) Six weeks after the massive 2200 page health care reform bill was passed into law small Alaska businesses are still struggling to figure out how it will financially impact them.
"At this point, no one really knows what the expenses are going to be," says Taco Loco Treasurer Annabel Galindo.
Taco Loco's owners, who do not like the law, seem to represent what a Dittman Research survey shows: 57 percent of Alaskans surveyed oppose the health care reform law, while 38 percent favor the changes, and 5 percent are unsure.
"I think it's being force-fed to a lot of people," says Galindo. "And if it's what the people wanted, throw it out there nationally to really get a vote. But right now, it's going through legislation, and they're not giving anyone a say."
Expenses appear to come later. On 2010 tax returns, however, which business will file next year, companies with less than 25 employees like Taco Loco will be able to deduct up to 35 percent of insurance costs if owners chose to buy their employees health care this year. In 2014, that credit jumps to up to 50 percent.
"It's concerning to us," Galindo says. "We stopped offering coverage two or three years ago based on our premiums."
Galindo is not sure if the new credits will be enough to offset the high premium costs which originally caused Taco Loco to take away all employee insurance.
"We felt bad as a company," Galindo says. "We didn't want to pull insurance away. But without really raising your prices to offset it, there's just no way to do it. It just became way too expensive for us to offer it."
For companies in the middle with 26 to 49 workers, nothing changes. But for businesses with 50 or more workers, 2014 is the key year.
If they are not providing employees insurance by then, owners will have to pay a $2,000 per worker, tax penalty.
Supporters say one of the reasons for that high fee is to stop employers who already offer insurance from dropping their more expensive plans and paying a fine instead.
To make sure companies have options to buy what supporters say will be affordable coverage, by 2014, states will also be required to set up a so-called Small Business health options program, or S.H.O.P. Exchanges, for businesses to purchase insurance.
Getting to the bottom of what that key 50 worker number means is still unclear.
When calculating whether owners will pay the $2,000, per employee penalty, employers are only allowed to exclude the first 30 workers. After that, every worker working more than 30 hours, including part-timers, counts.
The disclaimer at the top of the House Energy and Commerce Committee Republican analysis seems to sum up what many small business owners are dealing with:
"Because of the lack of clarity," the authors write, "internal inconsistencies, and ambiguity in the text, many provisions will inevitably be subject to dispute or alternative interpretations."
That state of health care confusion is causing the Galindo family, who has added five times as many employees as when they bought their business back in 1975, to try and figure out exactly what is in the health care recipe they continue sifting through, without seeming to find clear answers.
"You can only pass so much of the cost onto your customers before they start complaining as well," Galindo says. "Are you going to tell them 'well, it's because we have to pay for insurance for our employees?' I don't think that's going to fly with a lot of people."
To contact the Newsroom, call 907-274-1111.
"At this point, no one really knows what the expenses are going to be," says Taco Loco Treasurer Annabel Galindo.
Taco Loco's owners, who do not like the law, seem to represent what a Dittman Research survey shows: 57 percent of Alaskans surveyed oppose the health care reform law, while 38 percent favor the changes, and 5 percent are unsure.
"I think it's being force-fed to a lot of people," says Galindo. "And if it's what the people wanted, throw it out there nationally to really get a vote. But right now, it's going through legislation, and they're not giving anyone a say."
Expenses appear to come later. On 2010 tax returns, however, which business will file next year, companies with less than 25 employees like Taco Loco will be able to deduct up to 35 percent of insurance costs if owners chose to buy their employees health care this year. In 2014, that credit jumps to up to 50 percent.
"It's concerning to us," Galindo says. "We stopped offering coverage two or three years ago based on our premiums."
Galindo is not sure if the new credits will be enough to offset the high premium costs which originally caused Taco Loco to take away all employee insurance.
"We felt bad as a company," Galindo says. "We didn't want to pull insurance away. But without really raising your prices to offset it, there's just no way to do it. It just became way too expensive for us to offer it."
For companies in the middle with 26 to 49 workers, nothing changes. But for businesses with 50 or more workers, 2014 is the key year.
If they are not providing employees insurance by then, owners will have to pay a $2,000 per worker, tax penalty.
Supporters say one of the reasons for that high fee is to stop employers who already offer insurance from dropping their more expensive plans and paying a fine instead.
To make sure companies have options to buy what supporters say will be affordable coverage, by 2014, states will also be required to set up a so-called Small Business health options program, or S.H.O.P. Exchanges, for businesses to purchase insurance.
Getting to the bottom of what that key 50 worker number means is still unclear.
When calculating whether owners will pay the $2,000, per employee penalty, employers are only allowed to exclude the first 30 workers. After that, every worker working more than 30 hours, including part-timers, counts.
The disclaimer at the top of the House Energy and Commerce Committee Republican analysis seems to sum up what many small business owners are dealing with:
"Because of the lack of clarity," the authors write, "internal inconsistencies, and ambiguity in the text, many provisions will inevitably be subject to dispute or alternative interpretations."
That state of health care confusion is causing the Galindo family, who has added five times as many employees as when they bought their business back in 1975, to try and figure out exactly what is in the health care recipe they continue sifting through, without seeming to find clear answers.
"You can only pass so much of the cost onto your customers before they start complaining as well," Galindo says. "Are you going to tell them 'well, it's because we have to pay for insurance for our employees?' I don't think that's going to fly with a lot of people."
To contact the Newsroom, call 907-274-1111.
