Teachers, bus drivers, cafeteria workers, and aides are all in danger of facing reduced hours and less pay thanks to the law’s employer mandate. The mandate, which requires employers provide healthcare coverage for employees who work more than 30 hours a week, is proving to be a constant headache for business owners and employers across the country.

In response to the school districts’ frustrations, Members of the Indiana delegation sent a letter to Health and Human Services Secretary Kathleen Sebelius expressing their disappointment and frustrations with the job-crushing law.

“Secretary Sebelius, as a former Governor, we are sure you can appreciate the difficult choices being made in the heartland to deal with decisions handed down from Washington, D.C.,” they wrote. “Hundreds of middle class Hoosiers working in schools will now suffer the consequences of a law you told the American people would serve as a solution to making health care affordable for the middle class.”

So far, the Affordable Care Act has proved to be anything but affordable for millions of hard-working families across the country. These teachers and school employees are just the latest to suffer due to the overreaching, job-destroying, billion-dollar law.

Do you have a story about how ObamaCare is affecting you? Share it with us here.

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Earlier today, The Wall Street Journal reported that many small business owners are opting to suffer through the costs and pay the wildly expensive penalty that is imposed if they don’t provide health insurance for their employees. And the penalty’s price tag is hefty – $2,000 per business owner for each full-time worker.

While this option originally seemed to be more of last-resort for businesses who didn’t follow the employer mandate, it’s clear now that many business owners simply cannot afford to provide insurance for their employees under the new law.

Mr. Epstein, 52, employs about 250 workers and currently provides health insurance to his 20 office personnel. If he were to start covering the 100 or so nurses and nursing assistants that work full time, his annual health-insurance costs would jump to roughly $600,000 from the current $100,000, he says.

Even if he takes the penalty option, he estimates he would have to pay about $240,000—a cost he doesn’t think his business could absorb. To compensate, he plans to cut the number of hours his nurses and nursing assistants work so they will be considered part-time under the law. He says he will hire more part-timers to ensure patients receive the same level of care.

“We’re going to do everything we can in order to stay in business,” he says.

-The Wall Street Journal, Some Businesses Opt for the Health-Care Penalty, April 8, 2013

 

Between the debilitating costs of insurance premiums under the law, and the penalty that is imposed if you can’t manage the payments, ObamaCare is a lose-lose for business owners and their ability to provide for their employees and create jobs. More jobs lost, more penalties paid…all because of ObamaCare.

Do you have a story about how ObamaCare has affected your life? Share it with us here.

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This week Families USA, a liberal healthcare advocacy group, announced that there’s yet ANOTHER serious flaw in Obama’s health care plan.

Middle-to-low income families who are unable to receive insurance through their employer are eligible for a $4,000 tax credit to help pay for the insurance costs – except the method for determining eligibility is on an individual basis, not a multi-person family basis.

So what happens if the family’s income exceed the imposed limits due to higher insurance premiums and employer costs?
They’re ineligible to receive the credit and are effectively “priced out” of receiving the credit, which means they’re unable to buy insurance for their spouses or their children.

That’s right – President Obama has ensured that this law will make healthcare “more secure and more affordable” for millions of Americans, and yet families across the country are unable to receive the very credits he has championed. Even this Democratic group admits that this is a flawed law with major issues.

“It’s an issue. It needs to be fixed,” Ron Pollack, executive director of Families USA.

Do you have a story about how ObamaCare’s high taxes and costs has affected your family?

Share it with us here.

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– Fred M.

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- Laura B.

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Baked in the Sun is a wholesale baker and distributor of freshly baked pastries near San Diego.
 
THE CHALLENGE The company is one of thousands of small businesses that employ more than 50 full-time employees and thus will be required to offer health insurance to their workers — or pay into a government fund — beginning Jan. 1. Rachel Shein and Steve Pilarski, the married owners of the bakery, which employs 95 people, estimate this could cost their business up to $108,000, and they are weighing their options as the date approaches. “Our revenues are about $8 million, but the food business is a low-margin industry so cutting $108,000 out of our profits, which are just over $200,000, is a big deal,” said Ms. Shein, who is the chief executive. They are evaluating different ways to comply with the new law and finance the expense.
 
THE BACKGROUND Ms. Shein and Mr. Pilarski bought their first bakery, a maker of scones, 16 years ago. Their business grew along with the popularity of coffee shops, and they expanded their product line to include other pastries.
 
During the recession, the coffee shop business contracted, so they found new customers among hotels and hospitals, but the cost of servicing different types of businesses and developing new products to meet their needs eroded profits. At the same time, gasoline and ingredient prices went up and vendors tightened payment terms. Still, the couple persevered by providing an array of freshly baked goods and offering product variety and consolidated delivery, simplifying things for their customers.
 
With the recession behind them, Ms. Shein and Mr. Pilarski are trying to rebuild their profitability. Baked in the Sun produces nearly 200,000 items a day — almost 200 different products, including brownies, coffee cakes, muffins and cookies — in an 18,500-square-foot baking facility in San Marcos, Calif. The goods are delivered to coffee shops, schools, hotels and hospitals in the San Diego area.
 
THE OPTIONS Ms. Shein is contemplating several options to comply with the Affordable Care Act’s business mandate.
 
Option One is to provide the insurance. According to the law, Ms. Shein will have to offer health insurance or, most likely, pay a penalty, and she estimates the insurance will cost up to $108,000 a year for 90 employees (managers have insurance already).
 
This is just an estimate, she said, because the insurance companies have not yet created and set a price on plans that meet the law’s requirement for minimum care. She estimates a cost of $200 per employee a month, of which the bakery would pay half and the employee would pay half. Employees can choose not to participate in the plan if they are covered elsewhere or for other reasons, so it is unlikely they will all sign up.
 
Option Two is to not offer health insurance and let employees find coverage elsewhere, perhaps on one of the new government exchanges. Under this option, the company will probably have to pay the mandated “employer shared responsibility payment” to the government.
 
The cost to the business would be $2,000 per employee a year, but the law exempts the first 30 employees, so the total would be $130,000 per year for a 95-person company. One benefit of this option is that the company would not have to take on the burden or expense of managing the insurance plan, which Ms. Shein estimates would take $10,000 of staff time.
 
One way to cover the costs associated with the new law would be to raise the price of each item sold about 4 percent and pass the costs along to buyers. “It’s ironic that our success meant we could grow,” Ms. Shein said, “and now we will be competing against smaller companies, with 50 employees or fewer, who will be able to charge less per item because they don’t have the financial burden of health insurance.” Prices are currently similar among local competitors, Ms. Shein said, and she says she believes the increase in her prices could affect her sales, possibly significantly.
 
Ms. Shein is considering a third option: outsourcing certain jobs to reduce the staff, because businesses with 50 or fewer employees will be exempt from the penalty. “We can outsource the cleaning and make the drivers independent contractors,” she said, “and we can cut the least profitable delivery routes, least profitable accounts or reduce the variety of items we create.”
 
It is important for Ms. Shein to make a decision soon on staff levels because the number of full-time employees a business has in 2013 will determine its status in 2014. If the business has 50 or more full-time, or full-time equivalent, employees, it has to provide insurance to any staff members who work 30 hours or more a week. Companies can average their number of employees across the full 12 months in 2013 to see whether they meet the threshold, or they can instead calculate the number of full-time employees by using any six-consecutive-month period in 2013.
 
Ms. Shein said she believed all workers should have health insurance, and she and her husband had wrestled with the problem for years. “We have offered health insurance to our employees in the past,” she said, “for preventive care, for financial protection, and because it doesn’t make sense for taxpayers when they end up in the emergency room.”
 
However, she has found many of her employees resistant to coverage that requires an employee contribution. “They are mostly young and healthy,” she said. “They don’t have a lot of extra money, and they would rather have a bit more in their paycheck than health insurance.” Also, she said, some of her Mexican employees prefer to go south of the border for inexpensive health care when they need it.
 
WHAT OTHERS SAY John G. Ebenger, an accountant with Berkowitz Pollack Brant Advisors and Accountants in Miami: “It is a challenging situation, especially since the details have not been fully worked out. The bakery could opt to bite the bullet and pay the penalty next year with plans to revisit the types of insurance that become available in 2014. With a year to plan, insurance companies will come up with more options for employers.”
 
Jonathan Gruber, an economics professor at M.I.T. who advised the Obama administration on health care reform: “Rachel and Steve face a difficult decision, but it seems that the third option, to reorganize production and outsource functions to end up with fewer than 50 workers, will be too expensive to make much sense. Offering insurance won’t cost much more than the penalty, and in an industry where many of their competitors don’t offer insurance, they could advertise themselves as a better place to work.”<
 
Jody Hall, owner of Cupcake Royale, with 80 employees in Seattle, and a leader of theMain Street Alliance, a national network of small-business groups: “I’d recommend offering health care insurance for full-time employees, like we do at Cupcake Royale, as part of our responsibility to help strengthen the health of our employees, our community, and our business.
 
“Ms. Shein is probably overestimating her costs because not all employees will use the health insurance she offers. At our bakery only about half our employees use the health insurance we provide. Some are under 26 and covered by parents, others have spouses with coverage, and some just choose not to take it. Small businesses like mine who have been offering health care will be better off when all businesses are paying into the system because the cost increases will slow down.”
 
THE RESULTS Offer your thoughts on the You’re the Boss blog at nytimes.com/boss. Next week, on the blog and on this page, we will give an update on what Ms. Shein is planning to do.
 
Accessed 3/21/13, New York Times

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