Friday, November 16, 2012

Debunking the Obamacare Small Business Myth


Those who follow this blog know it is about entrepreneurship, peak performance and personal development. I prefer to leave the political firefights to others. However, one topic requires a bit of attention. This is the so-called "small business killing" Obamacare legislation. Let's debunk this myth once and for all.

I have been a small business owner for more than a decade and my biggest expenditure next to salaries has always been health insurance. My premiums went from an average of $300 a month in 2001 to almost $1200 in 2011. One would expect an increase in coverage but it is less today than 10 years ago. The rising cost of health care premiums is a noose around the neck of small business.

Much of the talk about Obamacare's "crippling impact" focuses on businesses that are anything but small. The news is filled with stories of Applebee’s, Papa John's Pizza and other CEO's vowing to punish customers and employees over the new law. But these guys with their 40,000 square foot mansions and 22 car garages do not resemble the small business owners I know. In fact, they bare no resemblance to the majority of small business owners in America.

The Obama administration's Affordable Care Act requires companies with more than 50 full time employees (30 or more hours per week) to provide health care coverage or face a fine. What most people do not realize is the vast majority of small businesses employ 10 people or less. For them, Obamacare is a welcomed change because most of these owners either do not have insurance or get coverage under a family member's policy. According to this article from Business Week, 83% of uninsured small business owners would qualify for subsidized coverage under Obamacare. In other words, they will gain access to affordable coverage for the first time. When is someone going to interview one of them?

How about my friend with Type 1 diabetes who also runs his own business? Without Obamacare, he is uninsurable. Ask him if the law is going to kill his business.

In my last company, I committed to providing full health coverage to my small staff for three primary reasons. First, this decision gave me a competitive advantage when looking for talent because so few companies made similar commitments. Second,  I wanted them focused on providing value to customers instead of stressing over the high cost of premiums. Third, I believe employees should be treated with respect and dignity. What better way to illustrate this than to contribute to the health and well being of them and their families?

I can name others who do the same, including my own mentor who employs over 100 people. He does not need legislation to mandate him to do right by his employees. He has done so for years. If you visit his office, you would think everyone hit the lottery, because they absolutely love working for this guy. The return on the investment in his employees is apparent in the low rate of turnover and the quality of work they produce.  

If his company of 100 employees can provide health insurance and remain a competitive, profitable business, are we to believe the owner of Papa John's cannot? A guy who makes well over 2 millions dollars a year in personal earnings? Let's all be honest and call his reaction what it really is-the political equivalent of throwing a temper tantrum.

So, the next time someone tells you how small business will be hurt by Obamacare, direct them to this post. Then, ask them how many small business owners they actually know.

Godspeed and I look forward to seeing you in The Players Lounge

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