Small Business Owners Still Looking for Certainty on Health Care
Subscribe today for Free Enterprise Updates
- Latest business trends and best practices
- News about legislation and regulation impacting business
- Business how-to articles from industry experts
- Commentary and interviews with newsmakers in business and politics
Think the Supreme Court's decision to uphold the constitutionality of the health care law provides greater certainty for small business owners? Think again. I spoke to business owner Patricia Owen of FACES Day Spa in Hilton Head Island, South Carolina, just hours after the court's decision, and she told me she doesn't feel any more certain than she did before the decision.
Owen currently doesn't provide health insurance coverage for her 25 employees. She used to provide full coverage but had to drop it during the economic downtown because it became too costly. Now that her business is doing better, she wants to start offering her employees coverage again, but it's not an easy decision.
“You know the [health care] battle’s going to continue on depending on who wins in November. This isn’t the end. Everything is still up in the air. I don’t know what kind of premiums we’ll have under the new law, what we'll have to pay. I do know I wouldn’t even qualify for any of the tax credits because my technicians are high wage earners.”
The law may make Owen's decision for her. Businesses with 50 or more employees are required to provide coverage beginning in 2014 or pay a fine. Owen wants to open another location, which would put her at the 50-employee threshold.
“Maybe we’ll make a decision by 2014. Either way, I’m going to have to pay. If I grow, I’ll have to pay. My business is ready to explode again, but it’s a hard decision. You should always be able to expand. But if I get another location, it will double my workforce. It’s a shame I have to worry something like that.”
Plenty of small business owners and their advocates feel the same uncertainty that Owen does.
“At this point, I have more questions than I have answers,” said Larry Mocha, president, Air Power Systems in Tulsa, Okla. “We already provide health insurance for our employees and have for many years. How will this impact our premiums? How will this impact [America’s] health-care system? And how will this impact my small business?”
“This decision sustains the uncertainty they currently have,” says Steve Caldeira, president and CEO of the International Franchise Association. “The impending costs of health care do not give business owners confidence to open that extra store or to hire more people and create the economic output our country needs.”
The Wall Street Journal talked to the plaintiffs in the National Federation of Independent Businesses' legal challenge of the health care law, including Mr. Klemencic, owner of Ellenboro Floors in Ellenboro, West Va. Klemencic said in the interview that "the implications are a lot bigger than people realize." His current business income "is enough to sustain me, but not enough to come up with an extra $5,000 or $6,000 dollars a year" to cover the cost of purchasing health insurance for himself, he said. He has no employees. More from the Journal:
"Every small business owner is dealing with escalating costs of fuel and materials and everything is passed on to the consumer," said Mr. Grimes, owner of Premier Renovations in Greenwich, N.Y., which has one part-time employee.
"That will break the backs of the middle class. If businesses are forced to pay, they may dump employees," he added. "It will be a very bad situation for the economy in the long run."