Just in case anyone doesn't understand how the new healthcare bill will affect small businesses, I'm passing along this scenario sent to me by an associate.
You know ... there doesn't seem to be a reason why this wouldn't affect ALL businesses. For years, UPS has used mostly part-time workers to lower their benefit costs -- current laws don't obligate companies to pay for benefits for part-time employees that same way they do for full-time employees.
You've heard the news reports -- some of the reduction in jobless claims are because people's unemployment benefits have run out, or because they've been able to find some kind of work that exceeds the dollar amount they're "allowed" to make while collecting. Even in our unstable economy, people have still managed to find part-time work (sometimes through temp agencies) even when they can't find full-time work. It has helped a lot of us hang on and pay for gas and food while we're looking for a more viable source of employment.
My guess is that there will be a lot of temp-agencies going out of business. The temp agencies will have to pay for health care, too. There's not that much "profit spread" between the minimum wage job they hire you for and the couple of dollars more that the hiring company pays for the convenience of not having people fill out piles of applications and be forced to rummage through them, and then go through the expense of doing background checks and drug screens.
The temp agencies could, of course, just give you some kind of half-a** medical policy ... except that our friends at the IRS will be deciding whether or not the policy they purchase for you (or the one you've purchased for yourself) is "good" enough.
... same for the "big" companies. If you've complained about your current crappy coverage, you're about to get something better!
Uh-oh. I almost forgot ..."including health benefits in taxable income could mean $246 billion in additional revenue for a single year."
If you pay the premiums, then you pay the tax. If your company is paying for all or part of your health benefits, then they pay the tax.
That brings us back to the beginning ... any company that is shelling out more of its net profit in taxes and fees is going to start re-evaluating the bottom line. Even the ones that don't have to pay a dime more will soon notice the downward trend of employee wages, and hop on board that train -- who wouldn't?!
While you're waiting for hours in the doctor's office to be seen -- without pay -- I hope you breathe a sigh of relief that the homeless guy on the street corner finally has his own Primary Care Physician, and can trot into CVS behind you to get his antibiotic prescription filled. Unless, of course, he's one of the 5-15% of the people who still has no coverage.
We’ve been having a lot of conversations with Small Business owners about how they will change their businesses if Congress passes their monstrous, prosperity-killing Health Care Bill.
We are also small business owners and employees ourselves, and what is emerging from these conversations frightens us and should frighten all American workers.
The consensus? "They can force us to pay for health care, and fine us if we don’t, but they can’t prevent us from firing workers or lowering wages."
When you change incentives, you change behaviors, and if this bill passes, Small Businesses are incentivized to lay off workers and lower wages.
As the health care bill in the house currently stands, employers will be forced to provide health insurance to all workers. Since health insurance is a compensation cost, employers are reviewing which employees are most important to them, so they can give them the most hours, and are making plans to fire employees who do not give them enough value to justify providing insurance.
If small businesses choose to not provide health insurance, they’re going to be levied an 8% of payroll fine. Since that just means total compensation costs go up by 8%, businesses will offset that by lowering wages (or firing people).
In fact, some businesses we’ve talked to are getting ready to lay off workers and then hire new people who have been laid off elsewhere, but paying a lower wage than they did for the same work before – but, hey, the employee will have mandated health insurance (even if her standard of living drops in every other area)!
In an era of 10% unemployment, massive deficits, and enormous national debt burden, growing unfunded liabilities for Social Security and Medicare/Medicaid, the government is about to do something that will kill wage growth and increase unemployment.
Oh, and it will mean less doctors who want to practice medicine, punishment of all companies that innovate in the medical industry, all while increase demand for medical services. Rationing, here we come.
We were right about Cash for Clunkers. And we’re right about this.
Our only hope is that someone in Washington wakes up. And soon. Because we’re at the precipice.
If you haven’t made a call to your representative recently, now would be a good time to make a last minute push.
Please email this to your friends, family members, and co-workers who work for small businesses, and let them know about this imminent danger.
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