Small Town News
Business owners oppose rising healthcare costs
Meoli: Death by a thousand cuts
Delaware Restaurant Association says Cape Region business leaders should get ready for healthcare costs that could escalate in 2014.
At a Feb. 14 meeting near Lewes, Carrie Leishman, president of the association, said businesses need to educate themselves on the future of healthcare.
Leishman said a coalition called Stop the HIT could help businesses gain a voice in Washington, DC, and target portions of the healthcare reform bill that could be expensive.
Stop the HIT refers to the health insurance tax that could be levied on businesses starting in 2014.
"The HIT is a pass-through tax - much like a gas tax. It is levied on insurance companies, but will be passed through to small businesses because the tax only applies to the kinds of policies that nearly all small businesses purchase," said Leishman.
Leishman cited a study that estimates a 3 percent increase in the cost of premiums, which could equal $500 a year for an employee with a family plan.
According to the Internal Revenue Service, starting in 2014, individuals and families without health insurance will be able to purchase it through an Affordable Insurance Exchange. Exchanges will operate in every state and the District of Columbia.
David Kendall, senior fellow for health and fiscal policy with Third Way, a moderate think tank based in Washington, D.C., said the tax applies to insurance companies.
"It's hard to predict how much the tax will be for insurance companies," said Kendall. "It will also depend how much employers can shift cost to employees, but I don't think it will hurt jobs at all."
One of the goals of healthcare reform is to make sure everyone can access affordable healthcare. Sen. Tom Carper said businesses will be helped by a tax credit, which aims to allow small businesses to provide health insurance to employees.
"As we work to make health insurance more affordable and accessible for all Americans, it's important that we provide small businesses with the support they need to provide coverage for their employees. These tax credits for small businesses will help that effort and I encourage all small businesses to utilize this new assistance provided under our comprehensive reform bill," he said.
Carper said research shows only 50 percent of small businesses provide health insurance to employees. He said between the tax credit and the state health exchanges, all Delawareans should be able access affordable health insurance in the future.
Kendall said the federal government is considering expanding the tax credit for businesses to include more small businesses with more employees and nonprofits. This part of healthcare reform has already started, allowing businesses to apply now for the credit. The credit is then applied toward the business's tax bill, which makes healthcare more affordable, said Kendall.
The U.S. Department of Health and Human Services offers an informational timeline at www.healthcare.gov/law/time-line.
Business leaders aren't sold
Leishman is traveling around the state meeting with business leaders to talk about what can be done to adjust the healthcare plan to make it work for small businesses in Delaware.
Carol Everhart, executive director of the Rehoboth Beach-Dewey Beach Chamber of Commerce, said she has already seen an increase in insurance costs to businesses.
Everhart organized the Feb. 14 meeting at Bethany Blues on Route 1 to unite business leaders and offer information about healthcare. She said healthcare costs could harm small, Cape Region businesses that are already struggling to stay afloat in a down economy.
Mike Meoli, McDonald's franchise owner in Rehoboth Beach and five other locations, said corporate leaders are saying increased costs are coming and that franchise owners need to prepare for them.
"No one can really figure out what the healthcare legislation says," Meoli said. "Even legislators have told us they will figure it out later. All I can guess is that we need to take our heads out of the sand and brace for this to happen."
Meoli said with costs of food already going up, insurance just adds to the burden on the backs of business owners. "It's death by a thousand cuts," he said.
Dale Lomas, co-owner of Atlantic Liquors on Route 1 outside Rehoboth Beach, said his business is already doing more with less. He said in the past few years he has been afraid to hire, and he has been doing without.
"Businesses have been on a collective diet because we are doing the same with fewer people," Lomas said.
"In the past, we floated an idea to start our own healthcare pool here. It wasn't the time then; maybe it is now."
Leishman said one goal of healthcare reform may be to send employees to the state exchanges, where they could purchase their own insurance, without going through the employer. She said if businesses can't afford to pay healthcare costs, they may choose to pay a penalty instead and send employees out to find their own insurance.
"We need to look at ways we can take a scalpel to the healthcare plan in some respects, and in other ways we need to mitigate the losses to businesses," Leishman said.
"Healthcare can be so overwhelming for businesses, and it's really just started to be talked about on a local level."
Meoli said future expenses could change how businesses are operating now.
"Businesses are human beings too, and we want to provide more health insurance, but because of this we can't," Meoli said. "Insurance is also a hiring and retention plan as well because it's a benefit to employees, especially if they have a family. It's going to to get to the point where I won't be able to offer the same coverage."
For more information on the Stop the HIT coalition, visit www.stopthehit.com. For more information on the Delaware Restaurant Association, call 302-738-2545 or visit www.delawarerestaurant.org.
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