Friday, December 6, 2013

WSJ: Obamacare rules hit small businesses

The Wall Street Journal reported the new "aggregation rules" under Obamacare are not exactly welcomed by small business. Simply put, the government counts all businesses owned by an individual as one business when counting towards the 50-employee threshold. Ownership means partial or full, the size of the ownership apparently does not matter.  The Journal stated:

Donna Baker of Adrian, Mich., owns an accounting firm, payroll company and retail store. Her husband, Kim, is the sixth generation owner of a dairy farm.

While the four businesses are separate entities, they count as one employer under the health-care law due to a technicality — Mrs. Baker is a minority stakeholder in the 1,800-acre property that her husband’s farm sits on, plus she helps out with some of the farm’s bookkeeping.

As a result, the Bakers are subject to aggregation rules in the U.S. tax code, which means they would be required to offer health-insurance benefits to their combined full-time staff — if it reaches 50 employees — starting in 2015, or pay a penalty.

“I’m just an investor in the farm,” says Mrs. Baker, who testified on the issue during a Congressional hearing Wednesday before the House Small Business Committee. “I am not running the day-to-day operations.”

The Bakers collectively employ just shy of 50 full-time workers, the threshold in which employers must provide health-care benefits to comply with the law. If they expand their headcounts in the coming year to 50 or more people, they would be subject to the mandate.

But while Mrs. Baker, 51 years old, says her payroll business is young and growing, she is hesitant to hire more staff. She says she’s already struggling to afford health benefits for existing employees at two of her firms and that having to start covering her husband’s eight full-time farm workers and future full-time recruits to any of their businesses would be too costly.....

“The calculations are complex and many small businesses will be caught unaware,” said Todd McCracken, president and CEO of the National Small Business Association, via email. Other business groups, including the U.S. Chamber of Commerce, International Franchise Association and the National Federation of Independent Business, have also expressed concern over how the aggregation rules apply the health law.

A spokeswoman for the U.S. Treasury declined to comment. During the hearing, Congresswoman Nydia M. Velázquez (D., N.Y.) said the aggregation rules are meant to prevent businesses from “skirting the law.”

One set of small-business owners most likely to be affected are franchisees such as Stephen Bienko of Allamuchy, N.J.

The 36-year-old entrepreneur owns four junk-hauling and moving franchises along the East Coast, each with about 25 employees. But come 2015, the businesses will be considered one employer under the health law, making them all subject to the employer mandate.

Mr. Bienko, who currently offers health benefits to only staffers who work more than 40 hours a week, says he estimates it will cost him an extra $125,000 a year, if all those newly eligible for employer coverage by law elect to take it.

The employer mandate defines full-time employees as those who work more than 30 hours a week, so Mr. Bienko says he’s planning to cut his staff’s hours in the year ahead, as well as hire only part-timers going forward, to try and avoid going over the threshold. Still, he’s not sure the strategy will work because the law, when calculating the 50 employee threshold, counts two employees whose combined weekly hours exceed 30 as a full-time equivalent.

“We’re just so darn scared,” says the College Hunks Hauling Junk franchisee. “I don’t have a team of analysts who can assist in calculating my company’s health-care costs. I’m afraid of making a clerical error that could have catastrophic financial implications.”.... Rest of article


4 comments:

Anonymous said...

Most federal statues and rules are good for accountants and tax lawyers.

Anonymous said...

“When one with honeyed words but evil mind
Persuades the mob, great woes befall the state.”
― Euripides, Orestes

Anonymous said...

Most federal statues and rules are good for the GubMint. Anyone who hasn't run a small bizniss has no idea of the headaches employees of small biz., gubmint and taxes create. The employees don't care because they aren't concerned about references from the employer, gubmint (local, state and national)are constantly monitoring(auditing) them, the small biz owner thinks accountants are out to screw them, so record keeping is unnecessary and when the gubmint says pay they either pay or have additional expense for representation. Combine all of that with permits, fees, etc.

Anonymous said...

Be aware that every new regulation making it harder to do business IN AMERICA is advantageous to businesspersons in countries which wish to compete with America. Our loss is their gain.

If I were the Chinese, I'd be bribing America's politicians to put into place regulations like these. And that's precisely what they probably ARE doing. Anything which makes America less able to compete makes our competitors and enemies MORE able to compete.

They're whittling-away at America's productivity, one regulation at a time...

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In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

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This is definitely a Beaver production.


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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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