A: I agree it stinks, but do you know what stinks worse? What we have right now.
Watching this bill wind its way toward law has been an unappealing sight, and yes, it is full of pork and kickbacks that verged on obscene. But then again, our system is designed for gridlock, give and take, checks and balances, and all that. No one said it was pretty.
So this is the bill we have. Is it good for small business? On the whole, I say yes. As I say, it beats the alternative, the status quo, and that is what this comes down to — a crappy bill with some good stuff, or nothing.
For the small business owner, one of the best things about this bill is that it will insure an additional 30 million people. While it is good and proper for a country like ours to do so, it is also good business, and here is why: While you may think the uninsured are the needy, the young and the impoverished, the fact is, many of those uninsured work for small businesses.
Why are they uninsured? You know why: It costs the small business owner too much to insure them.
Consider these sobering statistics:
• Only 49% of businesses with 3 to 9 employees (the vast majority of small businesses) offered any type of health insurance to their employees in 2008, down from 58% less than a decade ago.
• 29% of employees at businesses with 25 employees or less were uninsured in 2007, and the number is certainly higher today.
So for starters, small businesses being able to get more affordable health insurance is no small thing. Indeed, it is a big thing.
The main reason health insurance is so expensive for small business is that there is a narrow pool of people being insured. Bigger companies with more employees are better able to spread the risk, so premiums are lower, and they also have more buying power due to their size.
To counter this, starting in 2014, small businesses and the self-employed will be able to shop for plans offered through new state-based purchasing pools called exchanges. By pooling small businesses together, these purchasing cooperatives are expected to offer rates that should be lower because of 1) increased group purchasing power, and 2) bigger pools of insured customers.
What about the mandates to buy insurance?
For the most part these will have little effect on small business. Businesses with fewer than 50 employees will be exempt from the mandate, though it is expected that many companies will try to offer it for two reasons:
• The exchanges should create a more affordable option than is available now.
• The plethora of new tax breaks and credits written into the law as incentives.
Another expected benefit of the bill for business is that employees will likely be more willing to change jobs and join smaller firms because either there will be coverage at the new firm via the exchanges, or employees will be able to get affordable coverage themselves through the exchanges. The so-called "job lock" — where employees fear leaving a job because they don't want to lose their health insurance — should be a thing of the past.
Will the bill keep costs down? That is debatable, but what is not debatable is that the status quo is untenable. Something had to give. Hopefully this bill will deliver the changes small business owners so desperately need.
They say if you are squeamish, it is best not to watch sausage, or legislation, being made.
Today's Tip: What do buyers look for when buying a business, and what should entrepreneurs be doing if they want to sell their firm? If you want to know, I strongly suggest you pick up a copy of Built to Sell, by John Warrilow.
Covering every important aspect of the process, from attracting multiple bidders to getting the most for your business, this book easily explains what you must know and do if you want to create a business you can sell.
Ask an Expert appears Mondays. You can e-mail Steve Strauss at: sstrauss@mrallbiz.com.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.
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