Happy thanksgiving America.
As you enjoy the holiday and reflect, I encourage you to take a moment to ask yourself what you will be thankful for a year from now. Things are changing and there is no doubt you will be feeling an impact in November, 2013 at the very least in what you will pay in the grocery store to prepare the meal.
You will also probably have some questions about how to enroll in a health insurance exchange or whether you will see your hours at work reduced the following year.
This law is nebulous because of the authority given to the executive branch to implement it and craft critical rules and regulations.
Uncertainty exists in private enterprise. This is because things are changing rapidly due to a volatile global economy, the fiscal cliff, which is man made by the way, and now implementation of a health reform law that confuses policy wonks and decision makers in business alike.
Here are some things you should be aware of, especially if you work for a small business or you are an individual now required to purchase health insurance through an exchange.
In the words of former Secretary of Defense, Donald Rumsfeld, there are a bunch of unknowns and here are some you should be aware of.
- Known knowns: the Affordable Care Act aka Obamacare is moving full speed ahead and businesses are scrambling to prepare for 2013.
- Known unknowns: the impact perverse incentives in the law like section 1513 will have on the economy.
- Unknown unknowns: the power given to the executive branch to execute the laws concepts through rules and regulations and how that will impact small to mid-sized business.
Known knowns: things we know we know
The American economy is stagnation mode. Experts predict a 1% first quarter if the fiscal cliff cannot be addressed and sequestration happens. If they reach a deal they are predicting growth will not exceed 2%. Businesses are beginning to disseminate the Affordable Care Act and realize there are challenges for growth, particularly if they are in the 30-40 employee range because the law requires employers to provide coverage to their workers which is a large expense.
They are reacting by dropping insurance coverage and reducing their hours to part time. There are other strategies many do not yet understand, however, E.D. Bellis does and can help minimize new fees, taxes penalties and save businesses money.
Known unknowns: things we know we do not know
We know how everything played out with the health insurance exchanges as far as state versus federal. What we do not know, however, is how a federally run exchange will impact private reimbursement and competition. We are seeing consolidation and may have a completely different healthcare delivery system five years from now. How that will impact the quality and cost of care remains to be seen.
We also do not know how entitlement spending for programs like medicare and medicaid will be addressed because it is the number one driver to the national debt.
Future generations are seeing their share of the pie double and soon they will catch on because they are not stupid contrary to the belief of some.
Unknown unknowns: things we don’t know we don’t know
The real question will be how the regulations are written and implemented. There is a lot of fear that some of these new mandates will cripple businesses from a compliance end requiring them to hire additional staff. Many figure their firm will be all right and there are some businesses who will feel a minimal impact, however, they undoubtedly have clients who will be impacted.
Take a small business that has four locations in town and has 100 employees paying their people $11 a hour. They make around $400,000 after everything but they are facing $140,000 in new taxes. Will they be in businesses?
This is the biggest unknown. Unfortunately before any real revisions can take place the private economy will have to feel some pain and make some noise.
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