Operators of small businesses are going to be cutting full time employees throughout 2013 to under 50, to stay under the Obamacare tax.
Here's the thinking of one small business owner:
Here is what I am doing for the rest of the year -- working with every manager in my company so that as of January 1, 2013, none of our employees are working more than 28 hours a week. I think most readers know the reason -- we have got to get our company under 50 full time employees or else I am facing a bill from Obamacare in 2014 that will be several times larger than my annual profit. I love my workers. They make me a success. But most of my competitors are small businesses that are exempt from the Obamacare hammer. To compete, I must make sure my company is exempt as well. This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt. We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.
This will be unpopular but tolerable to most of my employees. The vast majority of them are retired and our company is merely an excuse to stay busy, work outdoors, and get a little extra money.
But this is going to be an ENORMOUS change in the rest of the service sector. I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business. One of my employees said that in Hawaii, it was all the hotel employees could talk about. Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees. 2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%. At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.
It is really going to get crazy, as the owner above speculates:
It will be interesting to see what solutions emerge. My bet is that it will become standard for people in the service sector to work two different jobs for 20-25 hours each with two different companies. This will be a pain for them, but allow them to keep their income up. The hard part may be coordinating shifts between companies. For example, a company that divides their shifts into mon-tue-wed vs. thu-fri-sat cannot share employees with one who divides their shifts between morning and afternoon. If given time, I would guess that just as the mon-fri workweek emerged as a standard, companies may adopt standard ways of dividing up the work weeks for part-timers, making it easier for schedules to mesh.
The solution, of course, is to disengage employment from health care, and have a single-payer system. Nothing will work without eliminating the ravenous middleman and enacting strict price controls within the health care system. We have already seen union strikes, where the members think that the employers have a money tree and are merely stingy, leading to the shutting down of businesses that cannot operate if they have to feed the health insurance parasites - yet the employers won't come out and say that, and promote real health care reform. They would rather shut down than tell the obvious truth. As far as this cutting hours scenario, if that happens, it will be responded to by the Obama administration and would be one of the things that will make the push for socialized medicine.
ReplyDeleteThe solution, of course, is to leave healthcare to a truly free market and remove all artificial barriers to entry and regulations/rules etc
DeleteSingle payer? Who is that magical single payer that pays for every person's health insurance and care?
DeleteAnd go back to black smiths posing as dentists.....great fucking idea. Nothing shows puritan free market reduces pricing....single payer has been proven the world over.
DeleteA truly free market would mean abolishing health insurance companies, outlawing them, and then each household pays for its own health care - directly to the provider. I wouldn't mind seeing that happen, as nothing would regulate the prices better or quicker. But there are some high-powered CEOs and associates who will do just about anything to keep their entitlements, at the expense of those whose claims are rejected.
Delete"And go back to black smiths posing as dentists.....great fucking idea."
DeleteYou mean like the people in Britain pulling out their own teeth because they can't get an appointment to see a dentist?
"Nothing shows puritan free market reduces pricing....single payer has been proven the world over."
Ok, should be easy. Prove it.
"A truly free market would mean abolishing health insurance companies, outlawing them..."
If you outlaw them, how would that be a "free" market?
"A truly free market would mean abolishing health insurance companies, outlawing them,"
DeleteNo, it would mean health insurance companies would revert back to being in the business of insurance rather than welfare brokers for the government.
"A truly free market would mean abolishing health insurance companies"
Delete??? What do you think a free market is? A government planned economy with prohibitions on business activity??
Doing away with insurance companies as a middle man is an excellent idea. You would contract with your local health care provider directly, pay your monthly membership fee and select a plan that suits your needs much like buying cell phone service.
DeleteThen when you need medical care just walk in, you have already paid and your a member, maybe no copay or maybe a small copay. Then other hospitals in the area will want you to contract with them, so they try to come up with a plan to entice you to them and hence competition. Then some bean counter will figure that the hospital will make so much more money if they can reduce hospital stays and that a proactive health care or wellness program could actually save money. Then hospitals would change focus from treating illness to preventing it. Free market is better, stimulate competition, now we have very little basically which insurance company you'd like to go with.
The solution, of course, is to disengage employment from health care.
DeleteBest statement EVER! Why are "employers" responsible for it employees healthcare insurance? What does one have to do with the other? The burden should not be on the backs of companies, it doesn't make sense! NO ONE, including companies in business, can afford todays medical prices or insurance premiums. Let's work on lowering the unaffordable, ever-rising costs instead of passing the buck!
I live in Britain and I have never, in all my life, heard of anyone pulling their own teeth becuase they couldn't get an appointment to see a dentist. Don't believe the hype!
DeleteGood to see the right solution right out of the block on this post.
DeleteEmployers should not be responsible for health care. Get these two separated ASAP.
Now, whether to go to a single payer system or a "free" market system?
The problem is, let's face it, many people flat out can not afford insurance. And furthermore, insurance policies are so convoluted, so many deductibles, so many exemptions, etc that no one can figure out WTF they are buying. Including me, and I am a surgeon.
Furthermore, the "competitive" free market argument is a laughable sham, as we currently have a fascist system ( Facism by definition is a duopoly of governance/control by politicians and corporations for the benefit of the few elite) whereby a whole slew of other services (telecommunications quickly comes to mind) are consolidating into into full blown monopolies. Hospital chains are doing the same, with no reduction in costs. Gee? I wonder why not?
Health care is hardly the same as buying a car, house, clothes, food, even education and life insurance ( we all know statistically we are going to die). Even if you are healthy, you don't know whether you will have to pony up a few thousand to treat a broken leg, or a few hundred thousand if you are diagnosed with Leukemia.
Today we have the worst of both worlds. A bumbling, corrupt , inefficient government payer and ravenous private sector . The government Medicare program is a money trough from which the so called private sector can pig out. See last weeks 60 minutes episode on HMA.. a health care corporation and what they were doing to get at that Medicare money.
Now back to market competition, as espoused by the free market folks. If you are over 50 or so and healthy, congratulations. You probably have enough money saved up to buy health insurance--for now. But as you get older and require more medical treatment, your costs will go up. And the insurance companies can only stay profitable by cherry picking only the healthiest residual of those older folks. Eventually though, all the low lying fruit gets picked, and the insurance companies can not maintain their profit margins.
On the other hand, the younger workers?? Good news. They are healthy and don't require much health care expenditure. The problem is, they don't have ANY money to buy health insurance these days.
So private health insurance, in my opinion, is on a path to an non affordable/ insufficient payer base singularity.
Do I "like" the government single payer idea? Hell, no! But due to the unique problematic nature of health care, it needs an "exemption" from the time worn argument of a "free market " approach.
Although many, including I , would be the first to argue that the military is an exorbitant waste because it is used to accomplish fascist
profiteering agenda, so too would a single health care system, but not as much as this hybrid system we have today.
Would you agree that a large portion- perhaps 80% of our medical expenses go to redundancies, regulatory idiocies, graft, waste and artificial scarcity, all created by numerous laws and regulatory bodies that control health care? If so, how can you say that a free market wouldn't work? High deductibles, charity hospitals, medical savings accounts- who knows what products would be created if the alphabet soup was thrown out.
DeletePlease respond.
"If you elect me I will make sure we get those evil greedy business owners like the one you heard about today. You have the right to healthcare AND a livable wage!"
ReplyDeleteEnter the permanent part-time workforce.
ReplyDelete401(k)? Forget it!
Profit Sharing? Forget it!
Paid Vacation? Forget it!
Thanks, Barry.
No thank you CEO's, they are the ones that will loose out and thus shrinking work forces so they don't have to loose money out of their pockets.....
DeleteThank a CEO that does this by telling them to KISS YOUR Arse and do not support any business that does this.
Workers are what made this country great, and workers will keep this country great not some greedy ass CEO.
They "loose" out and "loose" money? How so?
DeleteAh yes. The workers built Uhmurka in spite of their parasitic employers. Who needs capital, anyway?
DeleteThe other workaround is breaking up the single company with 400+ employees into 10 or so companies of ~40 working in some kind of joint venture, etc (I'm not aware that the legislation prohibits this). Thus, by definition, none have the requisite and horrifying 50 full-time employees. Of course, this restructuring would lead to higher costs in the form of more complicated accounting (or at least more cumbersome accounting). But if the costs are not prohibitive, it could be a preferable alternative to the morale-killing hour-cutting.
ReplyDeleteIn any case, there can be no doubt: Cronycare puts businesses between a crock and a hard place.
All employees within a "controlled group" are aggregated for purposes of determining whether an entity is subject to the tax for failure to provide medical coverage, so unfortuntately your proposed technique won't work. The aggregation rules are essentially the same rules that currently prevent a doctor from dividing his practice into two entities (one employing the doctor and the other employing the staff), and then adopting a great pension plan for the entitiy that employs the doctor and no pension plan for the entity that employs "his" employees.
DeleteThe purpose of "health care" is not to help the population, in terms of "wellness," in any way. These are Orwellian terms. This is a tax bill that will simultaneously be used to force medical tyranny on the population. What would make any person think that the government (via its real owners) would allow small businesses and part-time workers to escape.
ReplyDeleteThis is a chess game designed to corral the population then push us off a cliff (in the name of saving the Earth!). You can bet they will adjust the laws to ensure no one escapes. If they see businesses downsizing and people working less hours, they will modify the bill to prevent them from skirting the impending legislation. Again, absolutely none of this is being foisted upon us for our benefit.
You're going to get your vaccine, the insurance companies are going to get your money and you're going to like it. Let's get that straight!!
Recently, I went to my MD regarding joint pain. After some test I was prescribed Naproxan. I asked about other options was told that if I do not take this pill (I am an RN and understand about NSAIDS), he would chart that I was being uncooperative with care. This would put me in violation of Obamacare. Take you pill or else. And I have to pay for this or else.
ReplyDeleteTake the pills from him, don't have to swallow, and then never go back.
DeleteSurely, the effects of this were known before it was even handed out to congress. This is precisely what the fascists want - to destroy small business and competition for the bigger fish.
ReplyDeleteThe American middle class is being deliberately destroyed and those who see Obama's policies as benefiting the poor are deluded.
All the debt being dumped undemocratically on the generations of unborn children who didn't vote for any of this, is a massive tax that will only be unwound by the printing (counterfeiting) of money.
This massive destruction of wealth clearly and unequivocally leads to people deciding to not have children and this means this whole charade is nothing but a mass campaign of fascistic statist eugenics.
Biology gives this lesson clearly - diversity solves problems, a lack of diversity causes them. Central planning and the destruction of the free and diverse market, will be the downfall of civilization (yet again).
Surely, the effects of this were known before it was even handed out to congress.
DeleteThere is no way that this statement can be true. Remember the words of the great Nancy Pelosi - "But we have to pass the bill so you can find out what is in it, away from the fog of the controversy."
Nancy Pelosi
The tentacles of corruption are too intertwined into the system. There is no fix. You'd have to start completely over, oh, and everyone repent of their own immoral ways as well. You can't just change the system, the people have to be willing to adjust as well. Ya, like that's going to happen.
ReplyDeleteUnfortunately the ones with the power to start over are luciferian bankers/familes who aspire to be gods one day and want the place to themselves. Yikes, you know what that means.
Why don't we start with the employees who voted for Obama. Lay back the hours for them first?
ReplyDeleteWell, businesses may start out by cutting employees down to under 50 and cutting hours to skirt Obamacare, but eventually the government will pass legislation that makes it illegal to do so, or as an earlier commenter wrote, adjust the legislation so they can't escape, say, by lowering the number of required employees down to 25 from 50. They've probably already anticipated this, anyway. I'll bet they have Obamacare II on the books ready and waiting to go. But hey, the 47% have their phones.
ReplyDeleteYes, definitely start with the Obamatrons; it won't be easy identifying Obamatrons by their vehicles as the majority of them have gotten smart and taken the bumper stickers off, but you can bet just about everyone under 30, everyone who's black/Hispanic/other, female and/or gay that works for you voted for Obama. That's the bulk of his constituency. So there's your playing field.
ReplyDeleteHere is even more "good news." Suppose one of those former full time employees applies for a home loan. They now work two or more jobs just to make what they used to working one job. Under current lending rules, they must have a 2 year history of working multiple jobs before the income from both jobs can be considered. More unintended consequences.
ReplyDeleteOh, Joy!
DeleteSee my comment above...
Goddamn! I wish someone would invade the U.S.!
We could use some "liberation".
The free market is like a dog that is left alone for a week in a house with enough food and water for a week. He will eat it all in six hours and defecate all over the carpet, then starve. This is because he has evolved in an environment where survival means eat all you can as often as you can.
ReplyDeleteWe evolved the modern system of employer provided healthcare, minimum wages, progressive taxation, and health and safety regulation because most humans are not sufficiently self disciplined and farsighted enough to make a libertarian society feasible for most of us. That's why there is a Libertarian Party and it gets one to two percent of the vote each election generally. It IS the state's task to regulate these things, and it worked well for a long time. Excessive defense spending, and the change from the top one percent owning 90 to 99 percent of the wealth, changed all that.
The financial, insurance and real estate sectors have replaced manufacturing because of free trade nonsense, and this has also made CEO-to-worker pay rates go from 30 to 300 to one.
So much ignorance is so few words. So, if we're too stupid, then why not dictatorship rather than give us sub morons votes? If we don't have any rights to choose, why allow the weak to live?
DeleteAnd the "financialization of America" due to the insane Federal Reserve and manufacturing is gone because of the heavy regulations and taxes.
Perhaps you are proof that we are too stupid to control our own lives, but you are too stupid for me to be able to explain to you exactly how stupid you are. You're a piece of human filth, and deserve it when they come for you to take you to the gas chambers for being so stupid.
Oh, and an anonymous coward to boot. When your fantasy land of government granted goodness comes to a screeching halt, you will be among the first to starve. Us freedom lovers are smart enough to prepare for the day the government collapses in excess of its own filth. Good luck!
DeleteBoy. You dumb. And you say WE'RE dumb!
DeleteLoose? Sweet Jebus! It's "lose" damn it all! Have you some "loose" screws in your noggin?
ReplyDeleteOne of my pet peeves. That and "unnecessary quotes". :)
DeleteAt some point in time when inflation returns how can the goverment pay higher interest rates on all its debt without printing more money.The point is if the money is worthless then we are broke.How can any program be paid for.
ReplyDeleteThis is grave news. It would further bring down the morale of the country's workforce, which has already been suffering from rising utility costs and earlier job cuts.
ReplyDelete