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VOL. 127 | NO. 157 | Monday, August 13, 2012

Biz Owners Weighing Health Care Law Impact

By Andy Meek

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So far, it’s not easy to get a clear picture of how President Barack Obama’s health care law will affect Memphis-area small businesses.

That’s mainly because there are lots of business owners – including both supporters and even strident critics of the Affordable Care Act – who themselves don’t know what impact the law will have.

There are a host of reasons why many of them don’t know. Take the fall elections. If Republicans extend their control of government and either retake the White House or the Senate, or both, that likely will reshape the future of the law in a big way and serve as an opportunity for the pendulum to swing the other way on health care reform.

Even the law as it stands now has not yet been fully implemented. For starters, the official stamp of approval only came in recent weeks with the Supreme Court’s decision to uphold the law, the states are not finished setting up their respective health care exchanges and federal regulatory rules are being drafted.

Pieces of the law that affect young people, for example, already have taken effect. Others, like the mandate that everyone must purchase their own insurance if they don’t get it through their employer, will take effect later.

Many of those employers are the Memphis-area small businesses who haven’t yet figured out what the impact on their bottom lines will be – and who will shape the law further as they come up with their own responses to it.

To be sure, whether they are supporters of the law, staunch opponents of it or somewhere in between, that question mark was the common theme after talking to a random sampling of Memphis-area small-business owners in a variety of fields.

“Honestly, we are still trying to nail down the direct impact for us,” said Brian Sullivan, CEO of advertising and marketing firm Sullivan Branding. “(We) expect it to be expensive.”

Jay Myers, the founder of Memphis-based videoconferencing technology company Interactive Solutions Inc., said health care costs are a big expense already for his company.

“Honestly, we are still trying to nail down the direct impact for us. (We) expect it to be expensive.”

–Brian Sullivan
CEO, Sullivan Branding

“Health insurance is a major cost at ISI since we pay 100 percent for each employee,” Myers said. “Employees are required to pay for spouses and children. Obamacare will likely have us take another look at what ISI can and cannot pay for employee health care should costs go up.”

There is a school of thought that accepts some measure of health care as part of the social safety net the federal government makes available to people who need it. Those on the left side of the political spectrum assert not only that the safety net is unacceptably frayed, but that the federal government should step up to fix it.

One attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz PC who generally leans to the right politically, told The Daily News the issue of the federal government involving itself in health care at all is a variation on the old maxim about a camel sticking his nose inside a tent.

Eventually, that camel is going to want to come inside.

“In the long term, I don’t think it’s a good thing for small business or big business,” said local small-business consultant Robert Staub. “But let’s look at the reality. It’s coming together, and it’s going to happen. What’s going to happen? It really depends on the size of the business.

“I can’t sit here and say I think it’s a bad thing for the small-business owner in general. What I can say is I think it’s a bad thing for our country. We’re going to make all these promises to cover all this stuff, and somebody’s got to pay for it.”

Since the small-business community plays such a large role in American commerce – the vast majority of companies in the U.S. are small businesses – the reaction that community has to the law over time will be closely studied.

And since there is a bright dividing line, not to mention a philosophical gap a mile wide, separating opposing camps in the continued rhetorical war over the health care law, at least it won’t be difficult to tell which view is the correct one.

In time, of course.

“Under the health care law, small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses,” said Jim Brown, state director of the NFIB/Tennessee, a state arm of the national small business advocacy group.

Phillip Johnson, partner with Argyle Benefits Consultants LLC, spoke about the health care law earlier this year at The Daily News’ seminar on the topic.

“If you’re a small employer with fewer than 50 employees, typically you’re not going to face changes,” he said. “You will have options that relate to the health care that you provide your employees.”

PROPERTY SALES 36 154 6,546
MORTGAGES 34 94 4,129
BUILDING PERMITS 201 554 15,915
BANKRUPTCIES 43 126 3,396