Mt. Vernon Register-News

August 22, 2013

Health law a big concern for area businesses

By TRAVIS MORSE travis.morse@register-news.com
The Register-News

---- — MT. VERNON – To Brad Short of Centralia, the Affordable Care Act creates a “lose-lose” situation for his family's food service business.

The new health care law, he said, has sparked a lot of fear and speculation in the small business community about what the impact will be, not only for employers but for employees as well.

“Our small business employs close to 300 people and a lot of those folks will have to go to part-time now to avoid costs for us, which in exchange it'll lower the payroll for them,” Short said of the law's effect.

Short was one of roughly 30 people to attend an informational workshop Wednesday on the Affordable Care Act, geared toward the small business community. During the meeting, a number of concerns were raised about the new law.

The forum was hosted by the Illinois Small Business Development Center at the Rend Lake College MarketPlace. It was the second of two such workshops. The first one was held Aug. 15.

Over the course of Wednesday's two-hour session, instructor Dennis Foldenauer gave those in attendance a broad overview of the new health care law and its guidelines and regulations. Foldenauer is an economic development specialist with the U.S. Small Business Administration's Illinois District Office.

Foldenauer said his most important piece of advice to small business owners is to consult with their accountant and tax attorney about how best to comply with the Affordable Care Act.

“Make sure that you assess the Affordable Care Act's impact on your business individually,” Foldenauer said. “Everyone is going to have a different set of circumstances.”

The Affordable Care Act, commonly referred to as Obamacare, was signed into law on March 23, 2010.

Its primary intent, Foldenauer said, is to create more access to health care and to reduce insurance premium costs by increasing the “risk pool.”

Much of the discussion Wednesday centered around how to qualify for the law's small business tax credit and how to avoid penalties under the new coverage mandate.

In general, the tax credit is available to businesses that employ fewer than 25 full-time equivalent employees whose average annual wages are less than $50,000. To qualify, businesses also have to pay for at least 50 percent of their employees' self-only premium costs.

The coverage mandate mainly affects businesses with 50 or more employees. To meet the mandate, businesses have to offer coverage to at least 95 percent of their full-time employees and the coverage has to be “affordable” and provide “minimum value.”

During his presentation, Foldenauer fielded questions on a variety of subjects, many having to do with how to count and categorize employees to comply with the guidelines.

After the workshop, several audience members said they were grateful for the chance to learn more about the complex new health care law.

“I found it very informative and I was happy to see some of the resources that (were) provided for further education,” said Sheila Jolly-Scrivner, administrative assistant at Mt. Vernon Outland Airport.

Short said he wished there were longer courses available on this subject.

“I think the topic's way too expansive to cover in two hours,” Short said. “It's worth having. I just think it should be a two-day, eight-hour course as opposed to a one-day, two-hour course.”

Gwen Norton, human resource manager at Com-Pac International in Carbondale, was also happy to attend the workshop. However, the impact of the Affordable Care Act has her very worried.

“As an employer, there's a lot of concern,” Norton said. “The insurance, in general, is skyrocketing. I mean, we just received a 50 percent rate increase. So for us to cover that increase alone, we have to increase our sales by $4 million.”

For more information on the law, visit www.healthcare.gov.