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Companies Are Dealing with Obamacare Complexities, Too

Right now most of the drama being generated by Obamacare has to do with the failure of the web site and the slow going in getting individual Americans signed up for insurance coverage. But make no mistake: Even though business got a reprieve in the onset of the legal mandates of the Affordable Care Act to next fall, business owners are currently in the throes of important business decisions being prompted by the new law – and by its intended, and unintended, consequences.

In addition to complaints that Obamacare’s provisions covering business are difficult to understand and will be onerous to implement and pay for next year, a new concern is that such difficulties already are making it harder for mid and smaller firms to get loans.

“To qualify for some loans, especially for growth capital, more companies are being required to provide assurances that they will be in compliance” with the Affordable Care Act by 2015, according to the Wall Street Journal. “That might be tricky for restaurants, retailers and grocers, for example, which tend to have more part-time and transient workers than other types of business.”

And hard-bitten loan officers aren’t likely to forgive an unclear picture of Obamacare compliance, the newspaper said. Also, if a business is firing workers and cutting hours to sneak under the Obamacare coverage floors, that can sour a potential lender’s view of a company’s prospects as well.

Meanwhile, thousands of company owners are having to figure out exactly what their compliance strategy is. And any direction they look isn’t pretty.

Joseph Pancerella, for instance, wasn’t planning on changing health-insurance plans for his Shillington, Pa.-based financial-planning firm, Pancerella & Associates. Then, according to the Reading Eagle, he found out about the tax credit available to firms with 50 or fewer employees. But Pancerella is afraid to risk a shift in plans that might alienate his employees, who like what they have.

And North George Staffing manages about 400 temporary workers. But the owners told Fox News that Obamacare will count many of those staffers as additions to the company’s current full-time payroll of about 18 people. Under the law, the firm would have to provide insurance coverage to all or pay fines that could add up to $400,000 in the first year.

“I don’t think the legislators and president really looked into it before they considered this law,” co-owner Larry Underkoffler told the network.

A survey of over 1,300 businesses by the U.S. Chamber of Commerce showed that 71 percent of firms felt Obamacare was making it harder for them to hire. An alarming 27 percent reported that they planned to cut worker hours in order to reduce their roster of full-time employees.

As the law and it implementation appears to be a moving target, businesses should be aware of at least two things that may change one’s thinking for dealing with it.

The CBO now estimates some 6 million people will lose employer health insurance. Under one CBO scenario, the number could reach as high as 20 million pushed out of employers plans by 2019. As the reality hits more people in the workforce, more frustration and anger among workers will no doubt increase.

In addition, the CBO projected in 2010 that the employer-mandate penalties will cost businesses $52 billion by 2019. It has now upped that estimate to $106 billion through 2022. Now that the mandate has been delayed the projections will have to be recalculated. However, economist Douglas Holtz-Eakin of the American Action Forum estimates that the various fees the act levies on U.S. health insurance companies will increase premiums for small and mid-size companies by at least 3 percent.


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