September 5, 2012
In a recent survey from the National Federation of Independent Business (NFIB), 52% of small business owners polled said the issue of health care and its effect on business was a “critical” issue in the 2012 presidential election. According to a poll from the September issue of Fortune magazine, 57% of readers said that the “economic conditions for doing business in the U.S. are getting worse,” while 43% believe they’re getting better. It’s clear that the upcoming election is about the economy with a focus on health care, so what does that mean for small business owners?
I spoke with Thomas Kruczek, dean of the College of Business and Management and Professor of Entrepreneurship at Lynn University (where the final presidential debate will be held on October 22), about small business, health care, and the potential atmosphere at the debates to come.
Lauren Burns: What topics do you think will be focused on during the debate at Lynn University?
Thomas Kruczek: Across all of the debates this year, the question will always come back to the economy. I don’t think people are going to vote on foreign policy. In this election, it’s going to be about the economy and who has the better plan going forward – not looking back, but looking to the future. Business owners will be looking for the “pitch” from the candidate: what are they going to do to fix this? Most business owners are very optimistic, and we want to believe that the best is still ahead. So we want to hear from our political leaders how they’re going to make improvements.
Burns: According to the NFIB, “52% of small business owners said this issue is critical.” What’s the general feeling of small business owners and how health care, particularly the ACA, would affect them?
Kruczek: When I talk to entrepreneurs and business owners, one of the things they tell me over and over is, “Tell me what the rules are, and we’ll follow the rules.” The business owners need to be able to plan. If the Affordable Care Act is going to be the law of the land, so be it. Entrepreneurs and business owners are just saying they need some clarity.
Burns: The NFIB also reported that health insurance costs have increased by 103% for small businesses over the past decade. Why?
Kruczek: That comes from a conservative policy research organization, and what that tells us is that the cost of health care is going through the roof. The ability for small businesses to manage health care is difficult. Washington needs to help contain our costs.
Burns: What are common misconceptions about how the ACA impacts businesses?
Kruczek: I think the biggest misconception about all of this is the way people look at business owners. We want to do what’s right for our employees and their families. When I had my business, I had a lot of employees who would show me pictures of their children or their new house, and I was happy for them and proud of them and their families. The misconception is that business owners are ambivalent about our employees. When a business hires an individual, they’re making a commitment. We don’t want to be in a situation where we have to hire and fire all the time.
Burns: To quote the article “Hey Washington: Enough Already!” by Geoff Colvin and Allan Sloan in the September issue of Fortune magazine, “The fact that employees pay no income tax on the value of health insurance they get from their employer is the biggest, weirdest break of them all…” Is it a good idea to start taxing employees on their health insurance?
Kruczek: It would be a slippery slope to start taxing health care benefits of employees. I have no idea how business owners would manage something like that. If I have a company car, that’s simple – you either have one or you don’t, and you know the cost. But health care: do you base it on a flat rate or the amount you use? Is there a cap?
Burns: According to President Obama’s website, “Millions of small businesses are now eligible for a tax credit to help pay for their health care premiums. The credit will increase to cover 50 percent of premium costs in 2014. …help for small businesses—including the new insurance exchanges—will reduce small business health care spending by nearly 9 percent…” Is this policy effective at easing costs for business owners?
Kruczek: It’s a start. What are we doing to contain our costs? Baby boomers will be going to the doctor more, but how do we make sure that we really think before going to the doctor? For example, if I have a cold, what’s the difference to me if I go to the doctor? I’m not paying. But if you [have a personal investment in your health care cost], it makes a difference. Employees should have some level of accountability for their health insurance costs.