Archive for March, 2010

The Health-care Overhaul Bill’s Affect on Small Business Owners

Love it or hate it, we are moving to a new era in health-care which will begin to change the way company’s small and large address their employee’s benefits. These changes will begin to take affect over the next six months and continue to grow over the next several years.

So what can small business owners do now to prepare for these changes?

As with all changes that have an impact on a company’s bottom line you need to know what has changed. In order to do that you need to know your starting point. Here are a few steps business owners can do now to help them determine how the changes will impact their business.

  • Determine exactly what your ’07, ’08 and ’09 medical expenses were in total and for each employee
  • Who is covered by your plan and what options did they select (Single, Family, Dental, vision, etc..)
  • Age and lifestyle of your covered employees
  • What are your growth goals; adding headcount, reducing headcount or retaining current staffing level

Having this information handy while the health-care overhaul is implemented will help you to quickly determine what affect each change will have on your business and allow you to proactively maneuver your business through this changing environment.

I’ll leave you with a few thoughts that popped into my head while I was thinking about this post.

It will be interesting to see what the insurance industry’s short term reaction to this overhaul will be. As we just recently saw with the credit card industry, once the new regulations had passed, many if not all credit card companies raised their rates dramatically. It was common for credit card holders to see their rates go from around 5% to 20% or higher in the first two months of this year. So will we see the same reaction from the insurers? Did the recent hikes in California’s insurance rates give us a snapshot of things to come?

Lastly what will be the typical size of a small business? If the exemption threshold for mandatory coverage is set at 50 employees, will we see small businesses gravitate towards that number? Will we see larger companies splinter off into multiple separate standalone companies?

Just a few things to keep in mind over the coming months.