Prescription for Relief?
How Healthcare Reform Could Impact Your Shop
By Tammy Williams
NOLN Staff Writer
President Obama signed the healthcare reform bill into law late last March. Since then there has been quite a bit of confusion and some opposition — as of press time, efforts to block at least one provision of the bill were underway in 33 states — about the new law. But how will the new law affect you, a lube operator or manager? Keep reading to find out how the new healthcare overhaul with play out in the fast lube industry.
Amanda Austin, director of Federal Public Policy at the National Federation of Independent Business, said the biggest issue is that the bill in its entirety is not actually addressing the core issue of cost, which is what most small business owners really hoped it would focus on. The law, instead, is about the government intervening and offsetting people’s health insurance expense with taxpayer dollars — not driving down the cost of health insurance itself.
“It’s unfortunate, but I don’t really think business owners can expect decreases in their costs anytime soon,” Austin said. “In fact, they are probably going to see some increases in the cost of doing business in general. This bill has a lot of revenue offsets that are paid for by the business community.”
One of the more controversial points, which many states are trying to block, is the government-mandated level of coverage that nearly everyone in the United States must purchase or face a fine. This level of coverage is going to be defined sometime this year, so expect to hear more about it this summer.
“The (government-mandated) level of coverage is a pretty decent high-level floor,” Austin said. “Think of it like, ‘I really like my Toyota, but the government says you can’t keep it anymore; you have to get a Lexus.’ For some people it will be a buy-up. Not only will they get some premium increases, but they are also going to have richer benefit packages, which will cost more money.”
Coming in…2010
From 2010 to 2012, there will be pieces of the healthcare bill implemented. The majority of the bill will be in place starting in 2014. Here’s a look at what’s to come and how it will affect owners and operators in this industry.
In 2010, a temporary small business tax credit will be available to some businesses that provide qualified health coverage. The small business health tax credit included in the new law provides a 35 percent tax credit for the employer’s healthcare costs. The credit is available from 2010 to 2013 and then a 50 percent credit is available for two additional years if the employer meets certain criteria. However, the credit varies depending on the size and average wage of the business. Here’s the stipulations:
• A few small companies will receive the full credit. This credit is only available to companies with 10 employees or less. For businesses with 11 to 25 employees, the credit is reduced per employee. Companies with more than 25 employees are not eligible for the credit.
• Only businesses that pay their workers an average of more than $25,000 or less are eligible for the full credit. The credit is reduced as the average wage goes up and is not available if the average wage is more than $50,000.
• Only businesses covering 50 percent or more of insurance costs will be eligible for the credit.
• The credit is only available for a maximum of six years.
Another aspect of the law becoming active in 2010 is that children may stay on their parents’ insurance policies until age 26.
…2011
In 2011, employers will be required to report employees’ health benefits on W-2s. Also coming into effect are a couple of stipulations about health savings accounts (HSA) and flexible spending accounts (FSA) that you might need to be aware of. Consumers will be prohibited from using HSA and FSA funds to purchase non-prescribed items, including over-the-counter medication, except insulin. Also, the penalty for using HSAs for non-qualified purchases will increase to 20 percent.
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