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I post on a few other poltitcal boards and have a question I have yet had any of the small business owners answer. Although Ive been on CD for quite sometime, I never came to this part of the board and never knew it had this much activity. So needless to say Im very excited to get feed back from the SBO's of this board.
So, heres the situation..... When OC was passed, many SBOs said OC forced them to drop their employer sponsored health plans, which they offered to their employees. They stated OC made healthcare to expensive. First thing I would question, was the fact that SB's were waived from the OC mandate. But they still would say OC made their existing plans too expensive to continue to offer, and now their employees have no healthcare because the business could no longer offer their employer sponsored plan, and the employees could not afford to pruchase plans through the exchanges. OK, Fine.
OC mandates that employers declare the amount they pay for an employees healthcare insurance on the employees W2. So, lets say, on my W2 it states I made $30K in income and that my employer paid $10K for my healthcare. So basically I cost my employer $40K a year. Lets say, I work for a small bizz and OC would have caused my employer to pay $20K on my insurance, and my employer decided he couldnt afford that kind of increase. So, like so many other SBOs, he stopped offering insurance all together.
So now, the employer pays me $30K in wages and $0 in healthcare. I now cost him $30K instead $40K a year. The employer has saved/pocketed $10K on just me.
My question to SBO's is why did the employers pocket the $10K, and not just continue to pay the $10K they were already paying towards their healthcare. If that $10K was paid to the workers, they would have been able to afford plans from the exchanges. I never understood how OC got blamed for this, when it obvious many employers simply used OC as an excuse to pocket more money, and then to top it off, complain about how much OC was putting them in poor house.
Can someone please explain how OC and not greedy employers is to blame for so many employees of SB's to lose their healthcare insurance???????
Last edited by bigman123; 05-13-2015 at 04:50 PM..
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In your example $30k ($15.65/hour) is more than most small businesses pay their employees. In our state, a person making that amount will qualify for subsidies, with a premium of $153/month. That's about 41,836/year, so why would an employer pay $10,000 for each employee, it makes no sense financially. Now if they wanted to be nice, they could offer the people a $2,000/year raise to cover that additional cost to the employee, or even better keep the $10,000 as additional pay to also cover the high deductible, but I find it hard to believe that many business owners would do that. Those offering paid or partially paid health care do so to help retain good people, at some point that has to be balanced with the bottom line, and when told by their government that everyone will get cheap healthcare they no longer see a reason to spend their money providing it. I closed up in 2008, but my employees were making $12-14/hour back then, and I had them enroll in their own private HMO and paid half of it for them as additional pay, as it was very expensive to get company plans with only 3-4 people.
Can you name the tax that raised taxes on small businesses?
Obama raised Federal taxes.
And you forgot to include FICA taxes in your calculation. Taxes your employer pays to the government to employ you. Social security and Medicare taxes, also known as FICA taxes must be withheld from your employees' wages. The employer, must also pay a matching amount of FICA taxes for an employee.
- Social Security: Currently the social security tax rate is 6.2%.
- Medicare tax: The employer will match your 1.45% for Medicare tax.
In your example $30k ($15.65/hour) is more than most small businesses pay their employees. In our state, a person making that amount will qualify for subsidies, with a premium of $153/month. That's about 41,836/year, so why would an employer pay $10,000 for each employee, it makes no sense financially.
The amount makes no difference. Please dont make it more confusing than it has to be. PreObamacare they were paying wages AND paying for health insurance. The manadates in OC do not apply to them, but yet they say their prices of their plans after OC were too high. They eliminated their healthcare plans, and pocketed the amounts they were paying for insurance pre-obamacare.
They could have discontinued their plans and just added the amount they were paying health insurance pre Obamacare to the employees checks.
Your wages and health insurance are your compensation package. Theres no reason those employees packages should not have at least stayed the same after Obamacare. Instead employers pocketed that money and somehow blamed Obamacare.
Quote:
Now if they wanted to be nice, they could offer the people a $2,000/year raise to cover that additional cost to the employee, or even better keep the $10,000 as additional pay to also cover the high deductible, but I find it hard to believe that many business owners would do that.
What additional cost are you referring to. In my example, preObamacare the employee has a compensation package worth $40K, 30k in wages and a 10K health insurace plan. After Obmacare their compensation package is 30k, 30k in wages and $0 for health insurance. Employers were saying Obamacare was to blame, due to increase in premeiums. If thats the case, why not continue to pay the employee $40K, $40K in wages $0 in healthcare. Instead, those employers simply pocketed the money AAANNDDD cried broke.
How is Obamacare to blame, when employers had the choice to either continue to pay the employee what they were paid preObamacare, or cut the compenation package and pocket the savings, leaving their employees without insurance and without the funds to go get insurance.
I would love for someone to answer this... How does Obamacare get the blame for the CHOICES made by these employers.
Last edited by bigman123; 05-13-2015 at 10:40 PM..
And you forgot to include FICA in your calculation. Taxes your employer pays to the government to employ you. Social security and Medicare taxes, also known as FICA taxes must be withheld from your employees' wages. The employer, must also pay a matching amount of FICA taxes for an employee.
- Social Security: Currently the social security tax rate is 6.2%.
- Medicare tax: The employer will match your 1.45% for Medicare tax.
But they were paying this preObamacare and were able to pay 10k towards their employee's health insurance. So why was this tax that they have already been paying all of a sudden a problem? Remember, Obamacare mandates do not apply to small bizz employers.
But they were paying this preObamacare and were able to pay 10k towards their employee's health insurance. So why was this tax that they have already been paying all of a sudden a problem? Remember Obamacare mandates do not apply to small bizz employers.
I didn't say they weren't paying FICA pre-Obamacare, I was calling attention to the fact that you forgot to add the FICA taxes employers pay to the government for employing you in your calculation.
Quote:
Originally Posted by petch751
Obama raised Federal taxes. And you forgot to include FICA taxes in your calculation.
And yes, Federal taxes did go up. Then again, maybe since you were so hot to raise their taxes, they said, scr*w you.. who knows. Nothing like biting the hand that pays you.
I didn't say they weren't paying FICA pre-Obamacare, I was calling attention to the fact that you forgot to add the FICA taxes employers pay to the government for employing you in your calculation.
Well actually I didnt forget. I just assumed everyone already knew this, and its pretty irrelevant to this scenario since this tax was present both pre and post Obamacare.
Quote:
And yes, Federal taxes did go up. Then again, maybe since you were so hot to raise their taxes, they said, scr*w you.. who knows. Nothing like biting the hand that pays you.
Again I ask, can you please name the law Obama signed that raised federal taxes on small business employers.
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