Every fisherman has a story about the one that got away. For me, it is a 1,000-pound blue marlin the crew of the “Promises Too” fought for more than seven hours and 30 miles. Just as my partners and I were finally pulling it in, the big marlin lunged and broke away. Our daylong efforts were for naught.
In many ways, starting a business is like trying to land a trophy fish. It takes long hours, tireless effort and help from others. But even after all of that, if the conditions are not just right, success can wriggle off the boat, break the line, and disappear in a splash of “what-ifs.”
As someone who has worked in small business throughout most of my adult life, I am concerned for the people trying to land their own big fish and open a successful business in today’s environment. While nationwide economic measures are trending in the right direction, ask most small business owners in the Rocky Mount area and they will tell you they are still struggling and wary about the future.
One of the major reasons for concern is the upcoming implementation of President Barack
Obama’s Affordable Care Act. While the administration has gone out of its way to help large corporations and labor unions deal with the implementation of the health care law’s various requirements, small businesses have received no such help. In fact, small businesses and their employees will be directly affected by one little-known aspect of the law, and the uncertainty that it brings has caused some to reconsider expansion plans.
The health insurance tax, or HIT, is disguised as a fee charged to health insurers that sell policies on the self-insured and fully-insured market – where 88 percent of small businesses owners and the self-employed purchase insurance. Although not directly assessed to small businesses, the non-partisan Congressional Budget Office (CBO) has said it expects the HIT will be “largely passed through to consumers in the form of higher premiums.” The consumers affected by these costs will be either the small businesses that hold the key to ensuring our economy makes a full recovery or the hardworking people they employ.
While the HIT doesn’t officially take effect in January 2014, North Carolina families are feeling its impact. Businesses are already planning for higher health care costs for the next year, and for good reason. Analysis by Doug Holtz-Eakin, former director of the CBO, shows what can be expected if the HIT takes effect. According to this research, this one HIT (there are others) will cost a company $500 a year, per employee, and this is just one of the additional hidden cost in the Affordable Care Act. If small business owners must pick up the tab, less money will be spent on benefits and salaries for employees and it will be more difficult for them to grow their business. If small businesses can’t cover the increased costs, it means families will end up paying more and be forced to stretch already-tight budgets.
There is still a chance for the federal government to rectify this unfortunate situation. Bipartisan legislation has been introduced in the House of Representatives by Reps. Charles Boustany (R-La.) and Jim Matheson (D-Utah) to repeal the HIT. Between that bill and the companion bill in the Senate, more than 240 Democrats and Republicans have signed on to remove this burden from small businesses and their employees. These elected officials should be applauded for appreciating the magnitude of the issue and committing themselves to improving their local economies.
The time to act is now. While things are beginning to improve for the economy, a full recovery is still far from a sure thing. Just like landing a trophy fish, we cannot afford any missteps as we try to turn the economy around. The conditions have to be right, and repealing the HIT will go a long way to ensuring this does not turn out to be the recovery that got away.
Johnny Bass
Chief Executive Officer
Bass Business Solutions