Patterico's Pontifications

3/20/2013

The New York Times on How One Business Will Deal with ObamaCare

Filed under: General — Patterico @ 7:36 pm



Rachel Shein and Steve Pilarski have a problem. That problem is ObamaCare.

THE CHALLENGE The company is one of thousands of small businesses that employ more than 50 full-time employees and thus will be required to offer health insurance to their workers — or pay into a government fund — beginning Jan. 1. Rachel Shein and Steve Pilarski, the married owners of the bakery, which employs 95 people, estimate this could cost their business up to $108,000, and they are weighing their options as the date approaches.

The article takes us through three options that Shein and Pilarski have to meet . . . THE CHALLENGE.

One is to buy the insurance. That’s $108,000 a year.

A second option is to pay the penalty, er, tax, er, “employer shared responsibility payment.” That, apparently, is about $120,000 a year, net ($130,000 minus $10,000 saved in not having to manage the plans).

And the third option?

Ms. Shein is considering a third option: outsourcing certain jobs to reduce the staff, because businesses with 50 or fewer employees will be exempt from the penalty. “We can outsource the cleaning and make the drivers independent contractors,” she said, “and we can cut the least profitable delivery routes, least profitable accounts or reduce the variety of items we create.”

A related idea not mentioned in the article: she could have 49 full-time employees and 50-60 part-time employees working under 30 hours per week, I suppose. It may well be that some employees are going to become exployees.

(In totally unrelated news, looks like unemployment is going to skyrocket next year. Damn those Republicans and their damn sequestration!)

Shein and Pilarski say prices may be going up about 4 per cent at their bakery. That’s probably the only business in the country that will raise prices significantly to defray the extra costs of ObamaCare. Yes, my eyes are rolling — rolling like bowling balls.

(In totally unrelated news, looks like inflation is going to take off next year. Damn those Republicans and their damn sequestration!)

The article does not mention whether these two voted for Obama. I’d be curious to know. Heck, I *am* curious to know!

Apparently we’ll find out in about a week how Shein and Pilarski plan to meet THE CHALLENGE. I’ll stay tuned for that! Don’t change that channel!!!

110 Responses to “The New York Times on How One Business Will Deal with ObamaCare”

  1. God this is depressing.

    Patterico (9c670f)

  2. The incredulousness of the reporter is depressing.

    SPQR (aabf1e)

  3. $108,000 seems pretty cheap for one year’s worth of insurance for 95 people. Less than $100 per month per person. Or am I missing something?

    Gazzer (f439e3)

  4. Not sure how viable it would be… but, split the company in two? With each haing about 47 to 48 employees. Keeps them under the 50 cap – and limits potential future growth of either new entity. Would be some overhead increase to maintain to distinct companies, but would think it should be less than the first two options and perhaps more ’employee friendly’ than the 3rd. (?)

    (But, not a business person – so no idea if / how it would work.)

    Dilligas (cc8ddb)

  5. if they voted republican they would have the same last name

    it’s a thing

    happyfeet (8ce051)

  6. Appears that proper spelling is beyond my ability today…
    1) haing = having
    2) …to maintain two distinct…

    Dilligas (cc8ddb)

  7. here’s a flower for you Mr. Dilligas

    happyfeet (8ce051)

  8. A 4% increase in prices will put them out of business in a year. Pricing in the wholesale bakery business is brutal.

    htom (412a17)

  9. Actually, for purposes of determining labor force size, two part timers are calculated as one full timer. If you have 40 full timers, and 30 part timers, then you would have 55 ‘full-time equivalent employees’ and be required to cover the 40 full timers.

    Surely you didn’t think Reid/Pelosi/Obama would let folks get around the mandate that easily, did you?

    Glenn (c0f0df)

  10. $108,000 seems pretty cheap for one year’s worth of insurance for 95 people. Less than $100 per month per person. Or am I missing something?

    The article says that she is estimating that insurance will be $200 per month per employee, costs split 50/50 between the employee and the company. The article later says that they have offered insurance in the past, but the employees have balked at having to pay for their part of it:

    However, she has found many of her employees resistant to coverage that requires an employee contribution. “They are mostly young and healthy,” she said. “They don’t have a lot of extra money, and they would rather have a bit more in their paycheck than health insurance.” Also, she said, some of her Mexican employees prefer to go south of the border for inexpensive health care when they need it.

    Clearly the correct answer here is for them to offer insurance as mandated by the law, while telling the young and healthy works that not only are they going to have to contribute, but they are also not going to see any pay raises anytime soon (and, oh, by the way: probably 10-15% of you are going to be laid off soon). Regardless of whether the Sheins voted for Obama, it’s a pretty good bet that a lot of their workers did, so they might as well be faced with the consequences.

    JVW (4826a9)

  11. “Actually, for purposes of determining labor force size, two part timers are calculated as one full timer”

    Glenn – You are on the right track, but I believe the calculation is slightly more complicated. Part-time employees are potentially counted toward the 50 employee threshold for coverage but the employer must total up the total hours the part-time employees work in a month and dive by 120 to come up with the number of full-time equivalent employees to add to the actual number of full-time employees to assess compliance with the rules.

    daleyrocks (bf33e9)

  12. divide by 120.

    daleyrocks (bf33e9)

  13. 4.

    Not sure how viable it would be… but, split the company in two? With each haing about 47 to 48 employees. Keeps them under the 50 cap – and limits potential future growth of either new entity. Would be some overhead increase to maintain to distinct companies, but would think it should be less than the first two options and perhaps more ‘employee friendly’ than the 3rd. (?)

    (But, not a business person – so no idea if / how it would work.)

    Comment by Dilligas (cc8ddb) — 3/20/2013 @ 8:24 pm

    It wouldn’t work. If the owners try to do that then the IRS will still treat it as one business for Obamacare purposes.

    Just like this won’t work.

    A related idea not mentioned in the article: she could have 49 full-time employees and 50-60 part-time employees working under 30 hours per week, I suppose.

    That mix of full-time and part-time employees will put you well over the limit per the federal definition “full-time equivalent” employees. If those part timers each were cut back to 15 hours a week then they’d have 49+25-30=74-79 full time equivalent employees.

    http://www.irs.gov/pub/irs-drop/n-12-58.pdf

    Here it is in a nice, easy to read, easy to understand format as only the IRS can pull off. It’s just an 18 page definition of what is a full-time or full-time equivalent employee with the Orwellian name, “Determining Full-Time Employees for Purposes of Shared Responsibility for Employers Regarding Health Coverage (§ 4980H).”

    I’m sure when they come for your savings they’ll have a similar handy dandy guide to “Determining Shared Responsibility Debt Reduction Contributions for Band Depositors” or something like that.

    Steve57 (60a887)

  14. daley, take a peek at the IRS document I linked to. It’s slightly more complicated than you describe.

    And to say it’s “slightly more complicated” is like saying the surface of the Sun is slightly hotter than Washington DC in the summer.

    Steve57 (60a887)

  15. Nancy Pelosi was right: they passed it, now we’re finding out what is in it. This country is so screwed.

    navyvet (02dd07)

  16. Switching from full time to part time won’t effect unemployment.

    JD (b63a52)

  17. My God, I just read the reactions appended to the NYT blog post under the “What Others Say” heading:

    Jonathan Gruber, an economics professor at M.I.T. who advised the Obama administration on health care reform: “Rachel and Steve face a difficult decision, but it seems that the third option, to reorganize production and outsource functions to end up with fewer than 50 workers, will be too expensive to make much sense. Offering insurance won’t cost much more than the penalty, and in an industry where many of their competitors don’t offer insurance, they could advertise themselves as a better place to work.”

    OK, you are a young and healthy baker with two different job offers:

    Company A has 95 employees and therefore has a mandatory health insurance plan. The job offer is for $9/hour which works out to $1500/month, minus $100 deducted from your paycheck for health coverage. Your take-home is thus $1400.

    Company B has 40 employees and thus does not have to offer health insurance. Because of that, they can afford to pay a little bit more, $9.50/hour, which works out to $1583/month. Since there is no deduction for your portion of health care coverage, you take home $1583, almost $200 more per month than you would at Company A.

    So come on, Prof. Gruber, aren’t you really creating a system that encourages young and healthy workers to seek-out smaller companies that don’t have to offer health insurance? And doesn’t that ensure that the companies who offer health insurance will be at a disadvantage as they will mostly appeal to an older crowd who is thus more likely to get sick and miss work?

    But I guess being an academic is all about not having to pay attention to unintended consequences, let alone dealing with something has gauche and unappealing has the real world.

    JVW (4826a9)

  18. But I guess being an academic is all about not having to pay attention to unintended consequences, let alone dealing with something has gauche and unappealing has the real world.

    That’s my bad: we have academics who read this blog and are on our side. I should have written “being a liberal academic is all about. . . .”

    JVW (4826a9)

  19. Gruber, why does that name seem familiar, oh yes, he was an architect of Masscare, then a lobbyist for Obamacare.

    narciso (3fec35)

  20. But I guess being an academic is all about not having to pay attention to unintended consequences,

    I am not sure these are unintended consequences.

    JD (b63a52)

  21. “daley, take a peek at the IRS document I linked to. It’s slightly more complicated than you describe.”

    Steve57 – It’s an IRS document so it’s written to be complex. If you cut out all the unnecessary BS, the calculation I described starts on page 12.

    daleyrocks (bf33e9)

  22. 1. God this is depressing.

    Comment by Patterico (9c670f) — 3/20/2013 @ 7:39 pm

    You don’t know the half of it. Let me add to your evening.

    Over at Wizbang there’s a post, “How the government keeps the poor in their place.”

    At first it seems to be about Medicaid as Michael Laprairie links to a post on the Patheos blog by a woman who’s on government disability.

    I ran the numbers that the DHS indicated as my deductible amount: my Spend Down deductible for medical expenses must be 75% of my disability check (that’s right 75%) before I will be reimbursed. If it’s, say, 72%…oops, so sorry, you’re not getting any medical reimbursement and you’re out that amount to pay for your living expenses.
    So, let’s imagine my SSA monthly income is on the higher end at $1000 a month. This must pay for mortgage, utilities, food, clothing, laundry soap, and, well, all other personal hygiene stuff. And now imagine my medical and prescription expenses are at the low end at $720 for the month. That is only 72%, three points below my required 75% Spend Down deductible. Do the numbers ($1000 SSA income – $720 un-reimbursable medical). That leaves me with $280 per month to pay my mortgage, utilities, and groceries. Oh, and DHS added to my income my qualifying amount of $20 a month in food assistance. $20 a month for food?!

    But this just provides background because the “spend down” concept applies to Obamacare:

    Unsurprisingly, this rule change is yet another hidden easter egg in the massively complex new regulations that are part of the Affordable Care Act. In an earlier blog post, I discussed the rules that quantify “affordable” employee premium contributions to health insurance offered by their employers. It turns out that “affordable” is defined as 9% or less of total family income, meaning that for a family earning an average income of $52,000 a year, an “affordable” employee premium contribution could be as high as $390 a month. And that’s only for the employee’s insurance. Employers are not required to offer coverage for a spouse, and the coverage they offer for children is not required to be “affordable.” Further, if a family cannot afford employee-sponsored insurance and applies for insurance through an ACA insurance exchange, they are disqualified from receiving any type of Federal premium assistance because they declined to accept employer coverage – regardless of how much it would have cost.

    Isn’t that grand? If you can’t afford the health insurance your employer offers then you are disqualified from receiving the subsidy that was supposedly for people who don’t qualify for Medicaid but can’t afford health care.

    As I said earlier, Obama said that “he’d give” some small businesses a subsidy so they could provide health care to their employees (it was very nice of the god king jerkses to dig into his own pocket and offer that doncha think). From the site:

    http://obamacarefacts.com/obamacare-smallbusiness.php

    SHOP Exchange: Small Business Health Options Programs and Purchasing Qualified Health Plans (QHPs)

    Starting in 2014 small businesses employers with less than 100 employees (50 in some states) will be able to use the SHOP exchange. This is the small business section of the “ObamaCare” health insurance exchange. The SHOP exchange, or Small Business Health Options Programs, offer small businesses a large variety of Qualified Health Plans (QHPs) that allows employers and employees to choose insurance that meets their budgets.

    …SHOP Affordability. SHOP can save your business money by spreading insurers’ administrative costs across more employers. Small Businesses with may be eligible for tax credits and subsidies on the SHOP exchange as well.

    I don’t know any business person who went to the interactive site and after entering their data qualified for any of this. Particularly those he said he’d “help the most.”

    Dah Won gives in his speeches, then takes away with the fine print.

    Steve57 (60a887)

  23. narciso – Gruber was actually a paid consultant to the Obama Administration and one of the architects of Obamacare. Don’t sell him short.

    daleyrocks (bf33e9)

  24. “I am not sure these are unintended consequences.”

    JD – How about saying they are consequences they did not inform the public about.

    daleyrocks (bf33e9)

  25. with obamacare plus dow record rally plus super-stimulative keynesian deficits america’s future is splendiferous

    you can tell by how many people don’t feel the need to even look for work at all

    work is more like a chinese thing these days

    I for one say thank you barack obama

    happyfeet (8ce051)

  26. I am not sure these are unintended consequences.

    Well, there is that. I guess a lot of us have always assumed that the end game is single payer. After a couple of years of the 50-person requirement and the subsequent complaints about how that is disincentivizing growth, Obama in 2015 will have his Sec. of HHS declare that mandatory coverage now applies to every business with over 20 employees, then when that causes problems they will just throw up their hands and say, “F*** it, from here on in we’re going single payer.” The American people will have had five or so years of getting used to government healthcare by this point, so President Hillary will be able to get bare majorities in the House and Senate (after Harry Reid finally kills the filibuster) and everyone will talk about how this vindicates Hillary’s 1994 health care plans.

    How’s that for a dire future?

    JVW (4826a9)

  27. JVW – Camel Nose Tent

    daleyrocks (bf33e9)

  28. the calculation I described starts on page 12.

    daley, admittedly after the first couple of pages my eyes glazed over but I don’t see a simple formula anywhere starting on page 12 no matter how much BS you cut out. It’s all administrative periods, safe harbor periods, stability periods, blah, blah, blah. But it’s all about determining what rule the employer or individual employee falls under.

    Page 12 in it’s entirety:

    5. Seasonal Employee Defined

    The Affordable Care Act addresses the meaning of seasonal worker in the context of whether an employer meets the definition of an applicable large employer. Specifically, § 4980H(c)(2)(B) generally provides that if an employer’s workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 who were employed during that period of no more than 120 days were seasonal employees, the employer would not be an applicable large employer. Furthermore, § 4980H(c)(2)(B)(ii) provides that, for this purpose, seasonal worker means a worker who performs labor or services on a seasonal basis, as defined by the Secretary of Labor, including (but not limited to) workers covered by 29 CFR 500.20(s)(1) and retail workers employed exclusively during holiday seasons. The statute does not address how the term “seasonal employee” might be defined for purposes other than the determination of applicable large employer status, such as the determination of whether a new employee of an applicable large employer is reasonably expected to work full time for purposes of determining the amount of any assessable payment under § 4980H. Through at least 2014, employers are permitted to use a reasonable, good faith interpretation of the term “seasonal employee” for purposes of this notice.

    E. Examples
    The examples that follow illustrate how the safe harbors described above apply to variable hour employees and seasonal employees. For the rules that apply to full-time new employees, see section III.C, above. For rules that apply to part-time new employees, see section IV, example 5, of the notice (issued concurrently with this notice) interpreting PHS Act § 2708. In all of the following examples, the coverage offer is an offer of minimum essential coverage that is affordable within the meaning of § 36B(c)(2)(C)(i) (or is treated as affordable cover age under the Form W-2 safe harbor described in section II.D of this notice) and that provides minimum value within the meaning of § 36B(c)(2)(C)(ii).

    1.Examples of New Variable Hour Employees with an Administrative Period.

    In Examples 1 through 8, the new employee is a new variable hour employee, and the employer has chosen to use a 12-month standard measurement period for ongoing employees starting October 15 and a 12-month stability period associated with that standard measurement period starting January 1. (Thus, during the administrative period from October 15 through December 31 of each calendar year, the employer continues to offer coverage to employees who qualified for coverage for that entire calendar year based upon working on average at least 30 hours per week during the prior standard measurement period.) Also, the employer offers health plan coverage only to full-time employees (and their dependents).

    Page 12 is no different from page 11 or page 13. Or really any other page in this abortion.

    Steve57 (60a887)

  29. “daley, admittedly after the first couple of pages my eyes glazed over but I don’t see a simple formula anywhere starting on page 12 no matter how much BS you cut out. It’s all administrative periods, safe harbor periods, stability periods, blah, blah, blah. But it’s all about determining what rule the employer or individual employee falls under.”

    Steve57 – Mostly correct and what does any of the above crap have to do with the simple point which Glenn raised? Zero, zip, zilch, nada.

    You can complicate a two car funeral overthinking something. Review Glenn’s comment and my response. The point was switching full time employees to part-time status in an effort to avoid the 50 employee threshold of Obamacare may be a futile effort because part time employees are counted toward the threshold. Glenn claimed it was a 2:1 ratio. I provided a different formula.

    If you want to link an entire IRS document and write a dissertation about the complexity of safe harbors and other crap be my guest. I don’t think too many people have an interest. The point was the solution served up by the New York Times was not necessarily a viable solution based upon the rules.

    The page twelve calculation which I stated begins on page 12 continues beyond what you linked. Seek and you shall find.

    daleyrocks (bf33e9)

  30. The IRS writes an 18 page guide to “help” me as an employer define what kind of employee I have and what time periods I should or can use to calculate average hours worked per week, and I’m the one complicating things?

    Steve57 (60a887)

  31. “I’m the one complicating things?”

    Steve57 – I don’t see anyone else bitching and moaning about two simple comments smacking down the New York Times’ proposed solution do you?

    Do you do your own taxes? What makes you say this pub is more complex than their other rules for business?

    daleyrocks (bf33e9)

  32. Or even think it is any more complex?

    daleyrocks (bf33e9)

  33. I think I see the disconnect.

    Steve57 – Mostly correct and what does any of the above crap have to do with the simple point which Glenn raised? Zero, zip, zilch, nada.

    Glenn’s point wasn’t quite so simple. Glenn wrote:

    If you have 40 full timers, and 30 part timers, then you would have 55 ‘full-time equivalent employees’ and be required to cover the 40 full timers.

    The formula Glenn used wasn’t correct for determining the size of the labor force.

    But once you determine you’re above the threshold you still need to go through on an individual basis and apply the those administrative periods, stability periods, ad infinitum, to determine who you need to offer insurance to.

    Figuring out who those full time employees are isn’t going to be a walk in the park.

    Steve57 (60a887)

  34. 31. Do you do your own taxes? What makes you say this pub is more complex than their other rules for business?

    Comment by daleyrocks (bf33e9) — 3/20/2013 @ 10:28 pm

    Of course not. I have an accountant.

    Now I have more work to pay her to do. Yippee!

    Steve57 (60a887)

  35. “Glenn’s point wasn’t quite so simple.”

    Steve57 – No, Glenn’s point was simple, the New York Times blew it with their proposed solution. Glenn just suggested a calculation for determining the FTE that was wrong, as I said in my comment. End of story.

    You blew it up into a big magilla of the complexity of stability periods, administrative periods, etc., which is way more than anybody needs to know about with respect to the New York Times article.

    If you want to move the goal posts and write a post for Patterico about the complexity of IRS regulations and those surrounding Obamacare in particular, please be my guest.

    daleyrocks (bf33e9)

  36. the only thing i get from all this is that anyone who owns a small company is stupid to expand, and anyone running a larger one is screwed.

    as someone who would love to find a j*b, this isn’t good news.

    redc1c4 (403dff)

  37. Glenn – You are on the right track, but I believe the calculation is slightly more complicated. Part-time employees are potentially counted toward the 50 employee threshold for coverage but the employer must total up the total hours the part-time employees work in a month and dive by 120 to come up with the number of full-time equivalent employees to add to the actual number of full-time employees to assess compliance with the rules.

    You keep glossing over the fact that you and Glenn both think you’re just going to intuit who those full-time and who those part-time employees are.

    It’s not that simple. For many businesses, and I wouldn’t be surprised if this bakery is one, part-time and full-time are not going to be clear cut categories.

    Who cares if that’s more than anyone needs to know to with the respect to the NYT article? The NYT didn’t tell half the story about how complex it will be to try to comply with the Obamacare business mandate.

    Determining on an individual basis who you need to offer health insurance to, and when you must offer them insurance depending upon when the you determine they qualify as a full-time employee (initial measuring period, stability period, etc.), is part of compliance with the rules.

    Steve57 (60a887)

  38. and it’s going to be a very expensive part of the rules, even if you get it right, Steve57.

    this further drives home the point that it is likely overall to be much cheaper to cancel all health insurance and pay the fine, no matter how big the company is.

    between the cost savings from the direct payments, as well as being able get rid or a chunk of the HR department, and the savings of not having to have the yearly open enrollment meetings & drama, you are likely to be ahead on points.

    as for the negative of not offering this benefit, give the booming economy in Obamamerica, anyone who quits can be easily replaced. the honest people know nothing is getting better, no matter how often we are lied to.

    hell, if someone offered me a steady, paying, j*b, my only question would be “when can i start?”

    redc1c4 (403dff)

  39. It makes me wanna
    Holler throw up on my hands
    This just ain’t livin’

    Colonel Haiku (a34341)

  40. Or suck on an exhaust pipe

    Colonel Haiku (a34341)

  41. “You keep glossing over the fact that you and Glenn both think you’re just going to intuit who those full-time and who those part-time employees are.”

    Steve57 – Do you mean the 30 hour per week rule of thumb?

    Determining on an individual basis who you need to offer health insurance to, and when you must offer them insurance depending upon when the you determine they qualify as a full-time employee (initial measuring period, stability period, etc.), is part of compliance with the rules.

    The above sounds like an interesting subject for a very technical post as I keep saying, not a blog comment. Feel free to get a life any time and have mercy on that chicken.

    daleyrocks (bf33e9)

  42. We had this problem of risihng health care costs, and the solution was Obamacare?

    Would not the simpler solution of duirect price controls have made health care more affordable?

    His article is essentially a 26,000-word answer, the longest story that the magazine has ever run by a single author. It’s worth reading in full, but if you’re looking for a quick summary, the article seemed to me to boil down to one sentence: The American health-care system does not use rate-setting.

    Much of Brill’s piece focuses on the absurdly high prices that hospitals and doctors charge for the most mundane items. A single Tylenol tablet can cost $1.50 when “you can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power.” One patient gets charged $6 for a marker used to mark his body before surgery. Another is billed $77 for each of four boxes of gauze used.

    One hospital, according to Brill’s math, bills $1,200 per hour for one nurse’s services.

    “Over the past few decades, we’ve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs,” Brill concludes. ”Meanwhile … we’ve squeezed everyone outside the system who gets stuck with the bills.”

    In other countries, that cannot happen: Their federal governments set rates for what both private and public plans can charge for various procedures. Those countries have tended to see much lower growth in health-care costs.

    What sets our really expensive health-care system apart from most others isn’t necessarily the fact it’s not single-payer or universal. It’s that the federal government does not regulate the prices that health-care providers can charge.

    Michael Ejercito (2e0217)

  43. No way insurance for 97 employee’s is 108k per year … thats $92/month …

    JeffC (488234)

  44. yep … price fixing always keeps costs down …
    (its becasue of Medicare and Medicaid price fixing that they need to charge the high prices for everything else)

    JeffC (488234)

  45. “It’s that the federal government does not regulate the prices that health-care providers can charge.”

    Sorry Michael Ejercito, but neither do they regulate the prices restaurants can charge, or computer manufacturers, or iPod makers or any one of a million other items and services. Yet somehow we don’t have a problem with drastic price rises in those areas.

    I think the problem with health insurance might be the government regulates the services required to be covered and the fact that the govmint in Medicare and Medicaid ste the limits they’ll pay so any overages are pushed on private companies.

    Hoagie (3259ab)

  46. As an aside,
    you know all of that money that the government is injecting into the economy?
    where does one apply to be a distribution center?

    MD in Philly (3d3f72)

  47. “Would not the simpler solution of duirect price controls have made health care more affordable?”

    Just beautiful!

    Government price controls have been a tremendous success in every industry and country they have been used. Or they didn’t do it right. You can google it!

    daleyrocks (bf33e9)

  48. I think we need more direct price controls in this country, not just in health care, but in legal services, energy, electricity, higher education, food, transportation, communications, wages, rents and home prices a number of other things.

    It would make life simpler and more affordable.

    daleyrocks (bf33e9)

  49. My sons are so screwed. Ages 17 and 21, healthy, Caucasian and male. We are screwed as well because when they graduate from college we probably end up subsidizing them since they won’t be able to afford cell phone bills etc when most of their starting salary will be gobbled up by Obamacare. Of course that is assuming that companies will be hiring for starting positions and that rising minimum wages will not price new grads out of the work force! And they are not part of a group that can get preferential hiring either. So basically although college for them will be a strain on our budget, hubby makes too much for financial aid (no surprise there) but even though we are not in the top tax brackets we also make too much to deduct any part of their tuition on our federal taxes. That infuriates me no end. Basically we saved enough to retire in 15 years but the gravy we thought we could spend/save after youngest graduates from college has been usurped by King Obama. All while they gobbled up money by spending $1.4 billion (with a B!) on the Obama family last year alone. I simply loathe and despise everyone involved in the Obamacare, kill the middle class, nightmare. we are not the “1%” and the Dems have made sure that the middle class never again have the power to climb up. Heck, no wonder they want to disarm us back to torches and pitchforks.
    Sorry, rant off.

    TexasMom2012 (cee89f)

  50. Would not the simpler solution of duirect price controls have made health care more affordable?

    No.

    The cost of health care would certainly be “more affordable”. Of course, unfortunately, there would just be a handful of the health care products and services available any longer — and likely they would be heavily subsidized (directly or indirectly by the government. So what would be the purpose to that? Keeping prices “low” but destroying any incentive to the producers to provide the products and services? Remember the bread lines in the Soviet Union? Now do you know why those lines existed?

    Google how successful the Nixon wage and price controls were at stopping their intended goal of “taming inflation”. By the time Carter was finished, the inflation rate was over 14%. Typical result of socialist policies which ignore that pesky reality and the law of unintended consequences.

    It is simple Econ 101 that when you institute a price ceiling, supply dries up. You do this to health care providers — that is, you start telling them how much profit (if any) they can make — and they (understandably) cut back on or completely stop providing the product. Why is it worth their time and effort? You do understand that forcing these providers to produce their product at this point is enslaving the providers, regardless of how “critical” and “necessary” the industry actually is, right?

    J.P. (bd0246)

  51. Isn’t there yet another possibility? How about breaking the business into several smaller corporations (Sub S #1, Sub S #2 and Sub S #3) each with less than 50 employees. Of course, it is can be an administrative pain-in-the-neck (less so with Sub S corps), but it could be cost effective.

    T (13d0fd)

  52. 43. Michael Ejercito

    Michael’s post makes the critical point that the root cause of our health care problem is not so-called ObamaCare, but the underlying costs in our health care system. Health insurance systems, including the oncoming ObamaCare, respond to these underlying costs, and they are outrageous compared to those found in other countries. Obviously, this is why our health insurance premiums are so high.

    Unlike all other daily expenses we have, our health care is ripe for price controls.

    The Swiss, for example, have just that, and their per capita costs are about half of ours, and their infant mortality rate, as an example of outcomes, is also about half of ours.

    ObamaCare should lower health insurance premiums by requiring younger, healthier employees to have health insurance, as well as reducing the number of individuals getting their health care services from the emergency rooms of hospitals.

    Thus, the insurance premiums paid by the owners of the 95 employee bakery, a quite modest 108k per year, or $3.11 per day per employee, seems to me to be quite affordable for the bakery owners.

    And under ObamaCare, this $3.11 should not grow as rapidly as would be the case without ObamaCare.

    Granted, ObamaCare is an untested concept at this point. Since it is the law of the land, let us be patient and wait until it fully takes hold. Then, if adjustments are needed, we make adjustments, assuming that our dysfunctional Congress returns to functionality.

    Perry (23796f)

  53. 51. J. P.

    The cost of health care would certainly be “more affordable”. Of course, unfortunately, there would just be a handful of the health care products and services available any longer — and likely they would be heavily subsidized (directly or indirectly by the government. So what would be the purpose to that? Keeping prices “low” but destroying any incentive to the producers to provide the products and services? Remember the bread lines in the Soviet Union? Now do you know why those lines existed?

    J.P., I point you to the Swiss system, referred to in my previous post, #53.

    Perry (23796f)

  54. Steve57 – Do you mean the 30 hour per week rule of thumb?

    Daley, there is no “30 hour rule of thumb” for determining which employee must be offered insurance and when that employee must be offered insurance based upon the complex formulas the IRS has come up with.

    That’s all anyone one really needs to know. It doesn’t need to be any more technical than that. I linked the 18 page IRS instruction that gives the preliminary instructions on how to determine the above simply to show it is highly technical.

    So people would understand that the NYT and you aren’t telling half the story about how much of a nightmare it’ll be to comply with the Obamacare mandate to offer full-time employees health care insurance.

    The above sounds like an interesting subject for a very technical post as I keep saying, not a blog comment. Feel free to get a life any time and have mercy on that chicken.

    Comment by daleyrocks (bf33e9) — 3/21/2013 @ 5:54 am

    Understanding the rules may be complicated. And I’m sure no one is interested in a compliance lesson. But they may be interested to know that it’s going to be a lot more complicated than you and the NYT are saying.

    So why don’t you get a life and quit denying against the evidence that I’m entirely correct in what I’m saying.

    Steve57 (60a887)

  55. Price controls have worked famously throughout history, in the US.

    Perry just keeps on repeating the same old debunked canards.

    Thus, the insurance premiums paid by the owners of the 95 employee bakery, a quite modest 108k per year, or $3.11 per day per employee, seems to me to be quite affordable for the bakery owners.

    Yup, they surely have an extra 108,000 bucks laying around that they have no need for.

    and under ObamaCare, this $3.11 should not grow as rapidly as would be the case without ObamaCare.

    At every step in the process, the falsity of this fairy tale has been demonstrated.

    Ahhhhhh, but let us all wait to see what the bugs may be, and then work to fix the bugs at that time. Anyone care to bet that the solution to the problems created by massive federal intrusion into personal liberty is even more intrusion?

    JD (b63a52)

  56. Since it is the law of the land, let us be patient and wait until it fully takes hold.

    Actually, I think it would be better if more and more Americans treat their tax system the way the current Treasury of the Secretary and, in turn, head of the IRS did with his own income taxes several years ago. A wink-wink, nod-nod, look-the-other-way, look-the-other-way, in the manner of people in Greece or in the grand tradition of all the under-the-table “undocumented” in the US.

    Mark (bc9a80)

  57. The Swiss, for example, have just that, and their per capita costs are about half of ours, and their infant mortality rate, as an example of outcomes, is also about half of ours.

    This is an endlessly repeated liberal fallacy that all health outcomes are the result of available health care. The US has high infant mortality because of large numbers of women who do drugs during their pregnancy compared to probably every other country.

    There’s also an apples and oranges problem with comparing infant mortality rates since many countries don’t count it as a live birth until the baby has survived for some period of time like 24 hours or whatever. The US infant mortality rate counts all live births.

    Gerald A (fd4d6e)

  58. Gerald – That is but one of the many ways that particular statistic is distorted and flat out abused.

    JD (b63a52)

  59. Government price controls have been a tremendous success in every industry and country

    Better yet, the US government — to take a leaf from Argentina’s ultra-liberal president Cristina Kirchner — should make it illegal for economists and the media to report the actual rate of inflation. After all, if it’s good enough for a Banana Republic, it’s good enough for us.

    Mark (bc9a80)

  60. 43. We had this problem of risihng health care costs, and the solution was Obamacare?

    Would not the simpler solution of duirect price controls have made health care more affordable?

    Comment by Michael Ejercito (2e0217) — 3/21/2013 @ 6:20 am

    Do you mean how price controls in the form of rent control have led to plentiful, affordable housing in places like SF and NYC where it’s been implemented?

    The Concise Encyclopedia of Economics: Rent Control

    The Effects of Rent Control

    Economists are virtually unanimous in concluding that rent controls are destructive…

    It’s not a hard argument to follow. In order to legislatively control rents, then the law must mandate the rents are set below market value.

    Which means the existing landlords are screwed. But no one will build new rental units because and volunteer to be screwed after a state or a city puts up a neon sign that you’d have to be an idiot to invest in rental housing you won’t be able to get a decent return on.

    So price controls, in this case in the form of rent control, always leads to shortages of whatever is being controlled.

    That leads to higher prices. Which may seem counterintuitive if you don’t understand how it works. The landlord can’t raise the price on a tenant. But the landlord can raise the rent between tenants. So if the old tenant moves out, the landlord has to estimate how long the next tenant might stay, then jack up the rent sufficiently to make some money over that period.

    Which leads to $3k/month studio apartments. And that isn’t a guess. A friend of mine who was on a temporary job assignment sublet just such a place in SF back in the ’90s.

    It works the same way in every market. Medicaid is insurance in name only in most states. The price controls the government imposes on providers leads to a shortage of providers. No one will perform $100 worth of services for a $25 reimbursement. Well, very few. So Medicaid patients largely have to go to the emergency room, just like the indigent uninsured.

    Medicare is starting to work the same way. On another comment thread I linked to an article about how Medicare patients are having a harder time finding providers because providers lose too much money on them. Plus the paperwork and anti-fraud compliance rules are too difficult and time consuming.

    The easiest way to avoid losing money due to the price-controls the government imposes on providers (and lose money doing office busy work when you could be seeing other patients and then possibly lose money defending yourself against a fraud charge because you made a paperwork error) is to not take Medicare patients.

    The miracle of price controls.

    Steve57 (60a887)

  61. Link

    But in fact, the main factors affecting early infant survival are birth weight and prematurity. The way that these factors are reported — and how such babies are treated statistically — tells a different story than what the numbers reveal.

    Low birth weight infants are not counted against the “live birth” statistics for many countries reporting low infant mortality rates.

    According to the way statistics are calculated in Canada, Germany, and Austria, a premature baby weighing <500g is not considered a living child.

    But in the U.S., such very low birth weight babies are considered live births. The mortality rate of such babies — considered “unsalvageable” outside of the U.S. and therefore never alive — is extraordinarily high; up to 869 per 1,000 in the first month of life alone. This skews U.S. infant mortality statistics.

    When Canada briefly registered an increased number of low weight babies previously omitted from statistical reporting, the infant mortality rose from 6.1 per 1,000 to 6.4 per thousand in just one year.

    According to research done by Canada’s Bureau of Reproductive and Child Health, “Comparisons of infant mortality rates by place and time should be adjusted for the proportion of such live births, especially if the comparisons involve recent years.”

    Norway boasts one of the lowest infant mortality rates in the world. But when the main determinant of mortality — weight at birth — is factored in, Norway has no better survival rates than the United States.

    Pregnancies in very young first-time mothers carry a high risk of delivering low birth weight infants. In 2002, the average age of first-time mothers in Canada was 27.7 years. During the same year, the same statistic for U.S. mothers was 25.1 — an all-time high.

    Some of the countries reporting infant mortality rates lower than the U.S. classify babies as “stillborn” if they survive less than 24 hours whether or not such babies breathe, move, or have a beating heart at birth.

    Forty percent of all infant deaths occur in the first 24 hours of life.

    In the United States, all infants who show signs of life at birth (take a breath, move voluntarily, have a heartbeat) are considered alive.

    If a child in Hong Kong or Japan is born alive but dies within the first 24 hours of birth, he or she is reported as a “miscarriage” and does not affect the country’s reported infant mortality rates.

    The length of pregnancy considered “normal” is 37-41 weeks. In Belgium and France — in fact, in most European Union countries — any baby born before 26 weeks gestation is not considered alive and therefore does not “count” against reported infant mortality rates.

    Too short to count?

    In Switzerland and other parts of Europe, a baby born who is less than 30 centimeters long is not counted as a live birth. Therefore, unlike in the U.S., such high-risk infants cannot affect Swiss infant mortality rates.

    Efforts to salvage these tiny babies reflect this classification. Since 2000, 42 of the world’s 52 surviving babies weighing less than 400g (0.9 lbs.) were born in the United States.

    JD (b63a52)

  62. In the United States, all infants who show signs of life at birth (take a breath, move voluntarily, have a heartbeat) are considered alive.

    Not if they’re born in an abortion clinic. Or at least, Dr. Gosnell’s abortion clinic in Philly. and who knows how many others:

    (AP) PHILADELPHIA – In graphic testimony, a medical assistant told a jury Tuesday that she snipped the spines of at least 10 babies during unorthodox abortions at a West Philadelphia clinic. And she said Dr. Kermit Gosnell and another employee did the same to terminate pregnancies.

    Adrienne Moton’s testimony came in the capital murder trial of Gosnell, the clinic owner, who is on trial in the deaths of a patient and seven babies. Prosecutors accuse him of killing late-term, viable babies after they were delivered alive, in violation of state abortion laws.

    She once had to kill a baby delivered in a toilet, cutting its neck with scissors, she said. Asked if she knew that was wrong, she said, “At first I didn’t.”

    Abortions are typically performed in utero.

    Why would she know it was wrong? The press is reporting these things as if they were merely “unorthodox” or “atypical” abortions.

    But I suppose the Obamacare enthusiasts would have us be grateful to Dr. Gosnell for doing his bit to make our infant mortality rates look better by reporting these as abortions and not live births. I’m sure this isn’t the only place in the US where dedicated physicians are doing their bit to improve our stats in a similar manner.

    Steve57 (60a887)

  63. “So why don’t you get a life and quit denying against the evidence that I’m entirely correct in what I’m saying.”

    Steve57 – You are as shocked to find that IRS regulations are complex as liberals were to find out that the new Pope is Catholic. It’s as simple as that. You’re acting like Milhouse and want to have a discussion about the complexity of rules rather than the subject of the thread. I understand that. I prefer not to have that discussion in the thread. And yes I can deny you entirely correct in what you are saying, there is a 30 hour rule of thumb because employees working more than that number of hours are considered full-time. Employees working fewer than that number of hours may need to be factored into a calculation to determine whether an employer is required to offer health insurance to his/her employees.

    I’ll offer a pro-tip since you obviously panic at reading IRS documents. Can you think of any reasons why they tend to be so dense and incomprehensible to people not accustomed to reading them? Do you believe the IRS wants to receive phone calls from hundreds of thousands, perhaps millions of small business owners saying your publication did not cover business’s situation, how do I apply this rule? No, the IRS doesn’t want its phone lines tied up from here to eternity explaining every possible iteration of the application of the rules so they attempt to put it in their publications. A good way to read through such documents is to cross out the paragraphs that don’t apply to your own situation as you go through it and you wind up with a much shorter, redacted document. Freak out over.

    Now you have not disputed the conclusion I arrived at in comment 11. Unless you do, it seems like your only bitch is I did not describe in endless detail the provisions of an IRS Publication which was not necessary to respond to another commenter’s observation. I’m sorry my comment did not meet your standards, but you can conduct your argument clinic with somebody else.

    daleyrocks (bf33e9)

  64. There is a fourth option: hire a lobbyist to cozy up to a Democratic lobbyist, and with some well-placed campaign contribution, the business could get a waiver.

    Jeffrey Gower (351bac)

  65. It’s not an argument clinic. Your “30 hour rule of thumb” might be good enough to determine if your labor force is large enough to mean your business must offer insurance to full time employees.

    But if your “30 hour rule of thumb” puts you over that threshold that just means your compliance headaches have just begun. You and the NYT can gloss over that fact all you want. But it’s still a fact.

    Why don’t you get a life and stop disputing the obvious.

    Steve57 (60a887)

  66. the employer must total up the total hours the part-time employees work in a month and dive by 120 to come up with the number of full-time equivalent employees to add to the actual number of full-time employees to assess compliance with the rules.

    daley, does the IRS have any rules beyond your “30 hour rule of thumb” about how to determine who is and who is not a full-time employee?

    That’s a yes or no question. There’s no need to write a disseration.

    Steve57 (60a887)

  67. A new life awaits you in the Off-World colonies. The chance to begin again in a golden land of opportunity and adventure. New…– A new life awaits you in the Off-World colonies. The chance to begin again in a golden land of opportunity and adventure. New climate, recreational facilities…..

    SarahW would totally be a sucker for an ad like this (b0e533)

  68. small businesses don’t understand Obamacare

    it’s Bloomberg, so take with a shakerfull of salt.

    redc1c4 (403dff)

  69. Can’t wait for the first lawsuit by a full timer kicked down to part time to EVADE FEDERAL LAW. Hoarders! Fat Cats!

    My pitch for a new reality show: The Challenge, where we watch business owners navigate the obstacles put there by government paperwork and “taxes” for the new Obamacare program. Last business to fold wins!

    Patricia (be0117)

  70. off-world colonies eff yeah!

    happyfeet (4bf7c2)

  71. “It’s not an argument clinic. Your “30 hour rule of thumb” might be good enough to determine if your labor force is large enough to mean your business must offer insurance to full time employees.

    But if your “30 hour rule of thumb” puts you over that threshold that just means your compliance headaches have just begun. You and the NYT can gloss over that fact all you want. But it’s still a fact.”

    Steve57/Milhouse – The subject of the post and the comment to which I was responding was not compliance costs of Obamacare. Only your incredible obtuseness in moving the goal posts has resulted in making that the subject in your mind.

    daleyrocks (bf33e9)

  72. “It’s not an argument clinic. Your “30 hour rule of thumb” might be good enough to determine if your labor force is large enough to mean your business must offer insurance to full time employees.”

    steve57/Milhouse – If a business has more than 50 employees working more than 30 hours per week does it have to have to offer health insurance to them? This is a yes or no question.

    daleyrocks (bf33e9)

  73. “daley, does the IRS have any rules beyond your “30 hour rule of thumb” about how to determine who is and who is not a full-time employee?”

    steve57 – See comment 11 which provides a calculation of full time equivalent employees. It does not specifically identify individual employees.

    If you’ve got something else in mind, let me know.

    daleyrocks (bf33e9)

  74. On #74, or be subject to a penalty.

    daleyrocks (bf33e9)

  75. What about the ad with the pill popping geisha? I like that one!

    felipe (70ff7e)

  76. Actually, I am feeling the “argument clinic” vibe quite strongly.

    felipe (70ff7e)

  77. Maybe there is another option. I understand that there is some leeway in chosing an “affordable” (wink-wink) plan to offer employees. Why not offer a “really” “affordable” plan that no employee would wish to opt into?

    felipe (70ff7e)

  78. Felipe – then certain employees would get whacked in the exchange.

    I don’t understand why you hate-filled racist conservatives oppose these pro-growth policies that help billions, and bend the healthcare cost curve downward. Who could argue with that?!

    JD (b63a52)

  79. But I thought that we were supposed to save money by getting young and healthy people into the system!

    /sarcasm

    Seriously, if you’re young and healthy, you need catastrophic coverage and a payment plan. You do not need acupuncture, “free” birth control, three free doctor’s visits every year, and prescription drug coverage.

    Most of all, if you are young, healthy, and trying to get a toehold into the employment market while paying down your student loans, saving up for a tiny starter house, saving to buy a car that is a step up from a POS, you do NOT need to be subsidising middle-aged people at the peak of their careers.

    $200 a month for mostly young, healthy workers? That is the problem right there. Bring down the benefits, do some sort of 80/20 plan, and get them insurance for the cost of a cell phone bill.

    bridget (55e4a2)

  80. The “30 hour rule of thumb” is a recipe for getting your thumb chopped off. 120 hours or more in a month is not 30 hours a week. Use 29, most months have more than 28 days.

    htom (412a17)

  81. A second option is to pay the penalty, er, tax, er, “employer shared responsibility payment.” That, apparently, is about $120,000 a year, net ($130,000 minus $10,000 saved in not having to manage the plans).

    That’s not the second option. I think.

    The article briefly mentions and then glides over the idea of paying the penalty (which will be very low the first year)

    Or is the penalty the “employer responsibility payment?”

    I think there’s aindividual poenalty and a penalty on the employer.

    Now the catch:

    The article’s second option is to have its employees get coverage elsewhere. If even one they gets subsidized coverage, that’s when the employer penalty hits. But if none do, or maybe if less than 30 do – somebody shopuld look up the law – there’s no tax on the business.

    Now this is where Congress could kill Obamacare.

    Congress can zero out the penalty in the budget process..

    On top of that, in certain states there will be lawsuits.

    The issue is what if there a federal exchange, and not a state ruyn exchange.

    The law neglects to mention a subsidy on a federal plan. Not having a subsidy could cause people to opt for the individual penalty instead -also if no one gets a subsidy there is no employer responsibility payment.

    If courts uphold the legal argument that the subsidy only exists for state run exchanges, Congress will probably not tolerate this difference between states for very long.

    The first crisis of Obamacare will hit.

    Sammy Finkelman (d22d64)

  82. 82. Comment by htom (412a17) — 3/21/2013 @ 2:46 pm

    The “30 hour rule of thumb” is a recipe for getting your thumb chopped off. 120 hours or more in a month is not 30 hours a week. Use 29, most months have more than 28 days.

    On average, there are 4 1/3 weeks per month.

    A 31 day month can have 23 business days. (4.6 weeks)

    January has holidays and July has July 4. May has Memorial day. October has Columbus Day. December also may have a day or two off. But March and, especially, August, may have no regular off days.

    Sammy Finkelman (d22d64)

  83. Good Allah

    JD (b63a52)

  84. 120 hours divided by 23 days equals 5.217 = approximately 5 hours and 13 minutes – make it 5 houirs per day, 25 hours in a normal week.

    25 x 4.333 = 108 (but some months have more than average.)

    March and August need particular care to avoid going over 120. It is possible that pay periods might be looked at rather than calendar months.

    It probably is worth it for a business to be hiring a scheduler.

    Sammy Finkelman (d22d64)

  85. Or people could be hired for 3 days a week. 3 x 8 = 24 and you’d almost never go over.

    Sammy Finkelman (d22d64)

  86. Comment by Steve57 (60a887) — 3/21/2013 @ 9:49 am

    But no one will build new rental units because and volunteer to be screwed after a state or a city puts up a neon sign that you’d have to be an idiot to invest in rental housing you won’t be able to get a decent return on.

    Only because the banks are stupid.

    Cities invariably do not apply rent control to new housing.

    But if the banks insist on being stupid, what can you do?

    Sammy Finkelman (d22d64)

  87. I believe actually the rule of thumb that banks histirically use is whether or not a city has 40% or more rental housing.

    If it has over that, they consider there is a risk of rent control.

    It doesn’t matter whether or not a city actually imposes rent control or not.

    Sammy Finkelman (d22d64)

  88. Oh for goodness sake.
    There is a report by the Congressional research service that makes this as clear and concise as any government regulation could be:
    Summary of Potential Employer Penalties
    Under the Patient Protection and Affordable
    Care Act (PPACA)

    Hinda Chaikind
    Specialist in Health Care Financing

    Chris L. Peterson
    Acting Section Research Manager

    June 2, 2010

    It is available all over the net, such as here:
    http://www.ltgov.ri.gov/smallbusiness/employerprovisions.pdf

    Douglas2 (3b2af5)

  89. Steve57/Milhouse – The subject of the post and the comment to which I was responding was not compliance costs of Obamacare. Only your incredible obtuseness in moving the goal posts has resulted in making that the subject in your mind.

    Comment by daleyrocks (bf33e9) — 3/21/2013 @ 12:51 pm

    My “incredible obtuseness” also prompted me to point out the provisions in Obamacare are going to come as a great shock to employees who turn down employer offered health care insurance who may try to get coverage later through the exchanges.

    Not to mention those who accept it and find out due to the spend down provisions what that bill has to do their paycheck before they qualify for the subsidy Obama promised them. Or so they thought.

    22.

    1. God this is depressing.

    Comment by Patterico (9c670f) — 3/20/2013 @ 7:39 pm

    You don’t know the half of it. Let me add to your evening…

    Why didn’t you try to crawl up my alimentary canal about that? That was more than you needed to read the article. But then, my point was that the article barely scratched the surface of how complicated the Obamacare law will make health care insurance decisions for employees. As in “you don’t know the half of it.”

    75. steve57 – See comment 11 which provides a calculation of full time equivalent employees. It does not specifically identify individual employees.

    If you’ve got something else in mind, let me know.

    Comment by daleyrocks (bf33e9) — 3/21/2013 @ 12:57 pm

    Same point as above, but from the employer side of the table. What’s in that article “ain’t the half of it.” The NYT article barely scratches the surface of how hard this law will be to comply with.

    Steve57 (60a887)

  90. There is a report by the Congressional research service that makes this as clear and concise as any government regulation could be:

    http://www.ltgov.ri.gov/smallbusiness/employerprovisions.pdf

    Regardless of whether or not a large employer offers coverage, it will be potentially liable for a penalty only if at least one of its full-time employees obtains coverage through an exchange and receives a premium credit.

    Now there is the legal claim that premium credits can only be given on state run exchanges. This will be in the courts.

    On top of that, Republicans in Congress will probably try to zero out all penalties in the budget process. Although perhaps they are waiting for fiscal 2015.

    If there is no budget, then that becomes amatter for the continuing resolution. Or the next debt ceiling fight.

    Sammy Finkelman (d22d64)

  91. If part time employees count – and you get an extra employee at 120 hours, it’s better to have fewer employees.

    From the Summary of Potential Employer Penalties Under PPACA (P.L. 111-148)
    Congressional Research Service

    Scenario A

    The large employer does not offer coverage, but no full-time employees receive credits for
    exchange coverage. No penalty would be assessed.

    Scenario B

    The large employer does not offer coverage, and one or more full-time employees receive credits
    for exchange coverage. The number of full-time employees receiving the credit is not used in the
    penalty calculation for an employer not offering coverage. The penalty is simply the number of
    full-time employees minus 30, times $2,000 (assuming annual amounts). Thus the employer’s
    annual penalty in 2014 would be (50-30) x $2,000, or $40,000.

    Scenario C

    The employer offers coverage and no full-time employees receive credits for exchange coverage.

    No penalty would be assessed.

    Scenario D

    The employer offers coverage, but one or more full-time employees receive credits for exchange
    coverage. The number of full-time employees receiving the credit is used in the penalty
    calculation for an employer that offers coverage. The penalty is the lesser of the following:

    1. the number of full-time employees minus 30, multiplied by $2,000—or $40,000
    for the employer with 50 full-time employees (i.e., 50 minus 30, multiplied by
    $2,000); or

    2. the number of full-time employees who receive credits for exchange coverage, multiplied by $3,000.

    Although the penalties are assessed on a monthly basis (with the dollar amounts above then
    divided by 12), this example uses annual amounts, assuming the number of affected employees is
    the same throughout the year.

    If the employer with 50 full-time employees had 10 employees who received premium credits,
    then the potential annual penalty on the employer for those individuals would be $30,000.

    Because this is less than the overall limitation of $40,000, the employer penalty in this example
    would be $30,000.

    However, if the employer with 50 full-time employees had 30 employees who received premium
    credits, then the potential annual penalty on the employer for those individuals would be $90,000.
    Because this exceeds the overall limitation of $40,000, the employer penalty in this example
    would be the overall limitation of $40,000.

    Sammy Finkelman (d22d64)

  92. Are we in one of those internal feedback loops?

    JD (b63a52)

  93. It feels like it. it feels like it. it feels like it if peels ike it. ti sills ik ee. wohw doiw owdjwofjwo…..

    felipe (3243af)

  94. We need another chicken.

    daleyrocks (bf33e9)

  95. I think the problem with health insurance might be the government regulates the services required to be covered and the fact that the govmint in Medicare and Medicaid ste the limits they’ll pay so any overages are pushed on private companies.

    Justify $1200/hour for the services of one nurse.

    Surely nurses do not use transuranic elements on a regular basis.

    Michael Ejercito (2e0217)

  96. Doug @ 90, yes that’s a simple and concise document. But then the date on the document at the link is April 5, 2010. The PPACA was signed into law on March 23, 2010. Less then 2 weeks earlier. And the PPACA wasn’t actually a law. It was a wish list. It could not be implemented as written. It directed executive department agencies to actually write the law in the form of regulations. No one could have possibly predicted then how to comply with the law, and still no one can say how to comply with the law because the regulations are still being written.

    The fact is businesses will have to expend resources on an ongoing basis to determine just how many employees they have with respect to the employer mandate, and then determining who those full time employees are to avoid penalties. Then the employer can still be hit with fines for circumstances entirely beyond their control. Look at note d below the chart on page 5:

    d. Individuals who are offered employer-sponsored coverage can only obtain premium credits for exchange coverage if they first meet the regular eligibility criteria for credits (e.g., they are not eligible for Medicaid or other programs, and generally have income between 138% and 400% FPL) and meet the following additional criteria: they are not enrolled in their employer’s coverage, and their employer’s coverage either (1)
    requires the individual to contribute toward the plan premium more than 9.5% of their household income
    , or (2) the plan pays for less than 60%, on average, of covered health care expenses.

    So if an employer offers health care insurance to their employees, and one employee’s spouse loses their job, or they divorce or separate, reducing their household income and that employee qualifies for a subsidy, the employer gets hit with a hefty fine. And the way the regulations stand now the employer is not entitled to know the details as to why they got hit with a penalty.

    Which is why I say that while the NYT article shows it’s going to be a headache just trying to decide how to comply with the employer mandate, it doesn’t even scratch the surface of how much of a nightmare trying to comply with this monstrosity is going to be.

    Frankly, I think by design it will force companies like the bakery in the article to just dump the employees on the exchanges. The owner says she estimates offering her employees insurance will cost $108k. She also points out that’s a lot considering her profits are just over $200k. Imagine what she’ll think when she gets with a surprise penalty or two, further cutting into that profit. Trying to comply with the law just adds a great deal of great deal of monitoring and paperwork, plus the uncertainty that fines may pop up regardless. Paying the fine is cheaper and more certain.

    It may be easier and better for the employee as well. If the employee share of the cost of health insurance isn’t over 9.5% of household income then the employee doesn’t receive a subsidy. If they can’t afford the health insurance the company offers (even though the Obamacare regs says it meets their definition of “affordable”) then they are disqualified from getting a subsidy through the exchange. But if the employer doesn’t offer insurance then they can.

    I truly believe they made the regulations this complicated and mixed in that uncertainty to achieve that result.

    Steve57 (60a887)

  97. I never realized how stupid a bunch of free men, living in a supposed republic could sound trying to explain the rules of a law few want and most will have to disobey or die in poverty. If there are that many rules to explain one damn law then perhaps the law itself is BAD and needs to be ignored. Or better yet, we kill the bastards who passed it and their willing stooges who still support it.

    Hoagie (3259ab)

  98. Comment by Douglas2 (3b2af5) — 3/21/2013 @ 3:25 pm

    I’m assuming that was supposed to be a joke, since that CRS pub predates the HHS regulations themselves.

    SPQR (768505)

  99. “Why didn’t you try to crawl up my alimentary canal about that?”

    Steve57 – Simple. It was directed to Patterico so I didn’t give a crap that it was off topic. It was not accusing me of glossing over a complex topic in a two line response to another commenter, not acknowledging that you were entirely correct in what you were saying, or the various other sins you have accused me of over the course of this thread.

    I do think that it is totally awesome after beating the crap out of your point and badgering me over the course of a day you have decided to bravely declare your victimhood status.

    Well played, sir.

    daleyrocks (bf33e9)

  100. If you prefer I could have said how come you didn’t get your panties in a wad over it, daley.

    It was not accusing me of glossing over a complex topic in a two line response to another commenter, not acknowledging that you were entirely correct in what you were saying, or the various other sins you have accused me of over the course of this thread.

    Who’s playing the victim here? I’m sorry I hurt your feelings, Mr. Sensitive, but I didn’t accuse you of any sins. My original point was very simple; it’s going to be complicated to actually comply with the Obamacare employer mandate. You’ve been beating on that point for two days maybe but you haven’t made a dent in it. It’s still my point and it still stands.

    It was such an obvious point, and so obviously true, I still don’t get why you decided to even try beating on it.

    Steve57 (60a887)

  101. More on why Schein and Pilarski would be better off paying the fine letting their employees fend for themselves.

    WSJ: Health Insurers Warn on Premiums

    Health insurers are privately warning brokers that premiums for many individuals and small businesses could increase sharply next year because of the health-care overhaul law, with the nation’s biggest firm projecting that rates could more than double for some consumers buying their own plans.

    The projections, made in sessions with brokers and agents, provide some of the most concrete evidence yet of how much insurance companies might increase prices when major provisions of the law kick in next year—a subject of rigorous debate.

    …The gulf between the pricing talk from some insurers and the government projections suggests how complicated the law’s effects will be. Carriers will be filing proposed prices with regulators over the next few months.

    There’s that word; complicated.

    …The individual market includes about 15 million people, and around 18% of the roughly 149 million with employer coverage were at small companies, according to 2011 figures from the Kaiser Family Foundation. The individual market is expected to grow to around 35 million people by 2016 as a result of the law.

    In a private presentation to brokers late last month, UnitedHealth Group Inc., UNH -1.09% the nation’s largest carrier, said premiums for some consumers buying their own plans could go up as much as 116%, and small-business rates as much as 25% to 50%. The company said the estimates were driven in part by growing medical costs not directly tied to the law. It also cited the law’s requirements that health status not affect rates and that plans include certain minimum benefits and limits to out-of-pocket charges, among other things.

    Remember, folks, the employee contribution to purchase your employer provided health care coverage has to eat up 9.5% of your household income before you qualify for a gub’mint subsidy.

    So the health care insurance would have to cost something like $3800/yr for a couple making $40k before subsidies kick in.

    But does anyone think it’s beyond the realm of possibility that some of these bakery workers will be eligible for a subsidy if their spouse leaves them or loses their job? I can guarantee you they have full time employees making in the low 20s.

    “Our revenues are about $8 million, but the food business is a low-margin industry so cutting $108,000 out of our profits, which are just over $200,000, is a big deal,” said Ms. Shein…

    …she estimates the insurance will cost up to $108,000 a year for 90 employees (managers have insurance already).

    This is just an estimate, she said, because the insurance companies have not yet created and set a price on plans that meet the law’s requirement for minimum care.

    So if insurers are now estimating that health insurance costs for her business could, emphasis on could, rise 25-50% in 2014 that means she might actually have to pay $133-$158k.

    If the business only clears a little over $200k/yr and the owners have to pay $133k/yr for insurance, how many surprise penalties do you think they can survive?

    I don’t know what “just over $200,000″ is at the Bakery In The Sun. Let’s say it’s $225k. That’d mean they have $117k left if their original health care insurance cost estimate of $108k was correct. Since it clearly won’t be, then there’d be $92k left if there health insurance costs rise to $133k and only $67k left if it goes to $158k. (These are just ballpark figures assuming the business assumes the entire burden of the increase).

    But then they can’t really know what their costs will be in a year until the year is over. Considering they might get hit with a tax penalty for reasons totally out of their control. If one of their employees gets divorced and qualifies for a subsidy, what are they going to do? Fire that employee? How about if an employee’s spouse loses a job? Four to six months worth of tax penalties while the spouse looks for work would probably sink that business.

    Owning your own business is great, but there’s a break even point where if you sink below it’s not worth the effort. Keep in mind you can’t put every penny of profit in your pocket because you need to keep an operational reserve on hand.

    Steve57 (60a887)

  102. Buried in Federal Reserve reports is the fact that businesses cite Obamacare as the reason they are not hiring.

    Obama and the Democrats have made this recession worse by their blind pursuit of destructive policies.

    SPQR (768505)

  103. Add in Obama’s gaffe and f’up filled Middle East trip and its gonna be a looooong four years under this clown show’s second term.

    Its really bizarre but Obama was a lame duck in January of 2011.

    SPQR (768505)

  104. Which gaffes are you referring to?

    JD (b63a52)

  105. I think the problem with health insurance might be the government regulates the services required to be covered and the fact that the govmint in Medicare and Medicaid ste the limits they’ll pay so any overages are pushed on private companies.

    so the obvious solution is to impose price controls on all health care.

    Michael Ejercito (2e0217)

  106. This is a country in which a woman like this can get elected.

    WASHINGTON — Democratic Rep. Diana DeGette drew national criticism Wednesday for remarks made at a public forum in which she said banning high-capacity in ammunition magazines would be effective in reducing gun violence because “the bullets will have been shot and there won’t be any more available.”

    Is there any wonder why we have the laws we do? Why we have the economy we do. These are the people the electorate thinks should be in charge of tweaking the economy.

    Steve57 (be3310)

  107. Seriously, let’s put the guy who let a woman drown in the back of his Olds Delta 88 in charge of health care.

    This is not to be taken in any way as a criticism of the Oldsmobile corporation which got things right.

    http://www.youtube.com/watch?v=5bmVmpFB-oA

    “1971 Oldsmobile 442 Walk Around 455 Rocket”

    Steve57 (be3310)


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