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28 March  2010 ~

By now, we have all heard about the raging debate on healthcare reform.  However as business leaders do we know what it means to our businesses?  In this post, we will look at 5 questions we may have to address in the near future.

While there are numerous points to look at for healthcare reform, let’s take a look at some of the key ones for business.

When does it go into effect?  – by Jan 1, 2014, although some small businesses will be eligible for tax credits between then and now.

How will it impact my company? – It depends.  (Note: we are only focusing on the smaller businesses in this post).   If your company, has more than 50 employees, it will be mandatory for you to offer insurance.  There is a formula to calculate the level of insurance you have to offer – the business must cover no less than 72.5% of the cheapest health plan you offer for individuals, and no less than 65% for families

If you do not offer insurance, you will be penalized $750 per employee (first 30 employees are not in this calculation) and the Senate may raise this to $2,000 per employee.  In addition, you will be charged an additional fee that goes into newly established state run  insurance exchanges (also known as SHOPs)

Business Question #1 – Per the Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009, the average cost of healthcare for an individual in 2009 was $4,824 and $13,375 for a family.  Do you offer healthcare insurance or take the penalties?

Business Question #2 – This will impact the point above.  Per the same study, insurance costs have increase 128% since 1999, but there is no cost containment in this reform.  Will insurance costs continue to skyrocket and will that make it more economically attractive to pay the penalties vs offering insurance?

Business Question #3 – However you look at this, there will be additional cost either for penalty or for premium – will predicted benefits offset this cost?

This slideshare presentation above graphically highlights the business discussion in this post.

Company Size of 50 employees or less
Now if you are a company with 50 or less employees, you do not have to offer healthcare insurance.  However those that do, will receive tax credits.

Business Question #4 – Will the natural incentive to grow small business be stifled at 50 employees as business seeks to avoid growing into a new insurance bracket or is this a non issue? 

Business Question #5  – Conversely, if a small business isn’t offering insurance, will they have a hard time attracting new employees, mainly because it will be required that those employees purchase their own insurance?  What will the direct and indirect costs be here?

These are just a few of the questions we will be facing over the next 4 years.  My gut feeling is that this will not be the final version for healthcare.  There are too many constituents, too much regulation, and of course, it is subject to the political breezes we will get from the 2010 election and the 2012 presidential election.  So stay tuned, but in the interim, what is your take on it from your business’ perspective?

About the CFO Strategist
Chris is very proud to add Best Selling author to his resume.  The book he co-authored, 42 Rules for 24 Hour Success on LinkedIn reached best seller status on Amazon, hitting a high of #68 across all of Amazon! Recently the book was included in the “Top 100 Best Social Media Books, Ever” list at #77

To purchase the book, please go to or to Amazon.

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  1. Hey – interesting write-up. As we all know, the healthcare plan passed. We don’t yet know everything there is to know about it, but we all know that it is that it’s going to cost this country a lot of money. As a small business owner, I’m concerned about the increase in taxes. We all want to hire more employees, but the bill makes that very difficult for us small guys. Here’s my problem: If we can’t hire, how can this economy get back on its feet? Anyway, nice site… I’m subscribed to your RSS feed now so I’ll be checking in regularly!

    Comment by White Flood March 30, 2010 @ 8:39 pm
  2. Pretty insightful post. Never thought that it was this simple after all. I had spent a good deal of my time looking for someone to explain this subject clearly and you’re the only one that ever did that. Kudos to you! Keep it up

    Comment by Soo Woten April 3, 2010 @ 2:55 pm
  3. The thing I’m thinking about the Obama plan is this point about pre-existing conditions… Is there any stuff in this bill about if there is a limit on what insurance providers can require if you have a pre-existing problem?

    Comment by tower200 April 16, 2010 @ 4:10 pm

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