Of the many Obamacare tax increases which punish entrepreneurship and violate the president's pledge to not raise taxes by a single dime on the middle class, perhaps the one hitting small-business owners the hardest hasn't even come into effect yet: the employer health insurance mandate.
This is what brought small-business owners out against 'Hillarycare' 20 years ago, and it's the pole around which small-business owners now rally in their opposition to Obamacare, Bill Herrle, Florida executive director for the National Federation of Independent Business (NFIB), tells Sunshine State News. It's something [small-business owners] absolutely understand: it affects their ability to expand their workforce. Honestly, if It weren't for the mandate, our entire opposition to the health care plan would be much more generous.
Beginning in January 2014, business owners who hire more than 50 full-time equivalent workers will be required to provide government-approved health insurance for each of their employees. Those who fail to do so will have to pay a tax of $2,000 per employee (insured or uninsured), and an additional tax of $400-$600 if employers establish a waiting period to get into the plan.
A small employer with 100 employees could easily find themselves paying a tax of $300,000 per year, according to Ryan Ellis, tax policy director for Americans for Tax Reform.
Herrle warns that even many business owners don't realize just how much the mandate will affect them.
I can't tell you how many I've talked to that have whistled passed the graveyard, saying, 'I'm OK, I'll just reduce everyone below a certain number of hours, make them part-time, or hire independent contractors, he recounts, adding that the Obama administration keeps adding to the thousands of pages of regulations implementing the health care law, to keep employers from finding ways around it.
That's because the U.S. Department of Health and Human Services (HHS) still hasn't fully defined what exactly constitutes 50 full-time equivalent workers: an employer can keep his full-time workforce to under 50 employees, but still have enough part-time workers, or full-time employees working overtime, to reach that "full-time equivalent" threshold.
And although the mandate won't come into effect for another eight months, small-business owners are already spending thousands of dollars just to learn what they have to do to comply with it.
I'm getting billed more hours by my CPA, for him to look into the law more, an infuriated Ben Pumo, chef and owner of Benedettos Ristorante Italiano in Land O' Lakes, tells SSN. My CPA needs to take more time to see what we qualify for, and we can't estimate because we don't even know what this is going to be. They have no idea, because they don't know where to start, there's so many thousands of pages to this law."
Pumo says he's paid his CPA an extra $5,000 since January, and that it's going to cost him another $10,000 just to hire another outside consultant to advise him.
That alone is detrimental, just to find out how we can comply with this law, he explains. The worst thing for me is, this holds us back from growing. We want to build an outside deck on our restaurant, and this is one of the other major obstacles, staying under 50 employees.
And don't tell Pumo he's just one of the rich who wants to greedily withhold benefits from his employees.
I work a minimum of 70 to 80 hours a week: I'm the chef, I'm the owner, I'm the plumber, I'm the electrician, I'm the guy who blows leaves out of the damn parking lot, he fumes. People drive by, and they go, 'Don't you have people you pay for that?' I say, 'No, it's my business, and I'm f---ing proud of that. Everything else is so goddamn expensive, we have to save everything we can just to make a dollar.
Pumo's household income is less than $250,000, so the employer mandate is yet another imposition that violates Obama's oft-repeated pledge not to raise taxes a single dime on the middle class.
People have no idea what the true profit margin is of therestaurant he continues. We're looking at 7 to 8 percent margin off of $1.5 million. Do the f---ing math, people, You want to add [more taxes] on to that? Out of business, out of business, out of business!
David Hurley, owner of Landmark Engineering and Surveying Corp. in Tampa, reiterates those concerns, if a little less colorfully.
I'm looking for ways to get the same amount of work done with fewer people, just to try to avoid going over 50 employees, he tells SSN, explaining he currently hires 37 full-time workers, down from an all-time high of 89. I can't wait until Jan. 2 to say, 'O my gosh, look what's happening.'
Hurley already provides health coverage for his employees, but fears the kind he offers will not meet whatever arbitrary criteria are finally imposed by HHS.
His household income is just under $250,000.
He's a liar, Hurley says of the president's tax pledge, as he warns his fellow Floridians that those who will ultimately suffer will be those looking for work. If you don't have a job because we can't afford to hire you, you're gonna have a harder time finding a job; and if you have a job, it's going to be more difficult to keep you.
And if they increase the stuff we have to pay for, it might be cheaper to drop your health coverage and just pay the fines.
Reach Eric Giunta at email@example.com or at (954) 235-9116.