Want to know why some business owners don't like ACA?

[NNN0LHI]

http://www.irs.gov/newsroom/article/0,,id=220809,00.html

Reporting Employer Provided Health Coverage in Form W-2

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.

The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers.

More information about the reporting can be found on Form W-2 Reporting of Employer-Sponsored Health Coverage.

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If the business owners are anything like my deceased father in-law who owned his own construction company the last thing they want is for their employees to actually see what they are paying for their health insurance.

When my father in-law needed to negotiate with the insurance broker health insurance for his employees the last thing he was worried about was getting the best insurance for the least amount of money. He didn't care how crummy the coverage was or what it was costing his employees. He was only worried about what was in it for him.

The broker would show him a policy that provided good coverage at an affordable price but there was nothing in that for my father in-law. Then the broker would show him another policy that was more expensive with worse coverage but if he took the second one he was going to receive free all expenses paid vacations all over the world. Now he would have to pay taxes on any vacations he took or gave away to his friends or family members, but that was a small price to pay. And his employees were never the wiser.

I was with him one time he was breaking the news to his employees about the higher premiums he was going to have to charge them for crappier coverage. Oh, he looked disappointed and put on a long face to his employees but he was laughing inside. He always blamed the increase on the insurance companies or any Democratic politician he could think of at the time. But that was all BS. It was his fault. He got greedy. And the system was set up to reward greed.

Now when an employee gets his W-2 form that employee is going to see exactly what that health insurance really cost the business owner. Minus any perks the owner received.

See why some business owners are going completely ape shit over ACA?

Don

[Firebrand Gary]

1. Juicy, indeed! K&R nt

[SoutherDem]

2. I never assumed the employer was worried about their employees

when negotiating insurance but how little it would cost them. I didn't know they were getting freebies in the process.

[tblue]

3. Creepy Inlaws. Must be a chain of those across the country.

These people who have no concern for anyone but themselves are just rotten to the core. They eff up everything. And they are everywhere. Ugh!

I'm sure you're right. Amd that's one more good thing about ACA I hadn't realized was in there. Thanks.

[hedgehog]

4. Kick!

My in-laws were part owners of a small business, and my FIL was an employee. My MIL always insisted on being given the money in hand so she could go out and buy the best health insurance policy herself!

[hollysmom]

5. I was chatting with someone about that the otehr day

to my great surprise when I googled it, it was reversed in April and is no longer a requirement, Most people don't seem to know this. I would google it again, but at the beach and internet is crap down here. can someone else find the link?

[Enrique]

8. they did reverse some reporting requirement

I don't think it was this one, however.

[hollysmom]

9. thanks, I would have googled it if I could -

beach vs internet - and 90 degrees - beach wins.

[Swede Atlanta]

10. Interesting thought......

The disclosure serves a couple of purposes:

(1) It represents to the employee the value of the employer's contribution. My employer gives me an annual statement of the value of my benefits from health insurance to vacation, etc.

(2) It will be used in a determination of whether or not the insurance is a 'cadillac' plan in something like 2018 or 2019 that subjects the employee to a fee

I am all for disclosure. Why shouldn't what an employer pays toward health insurance be known? I have always said "sunshine" is the best policy.

[Igel]

14. Known to who?

To you?

My employer's said that for years. Long before I was hired, it was given to you in a monthly statement.

How much I--and they--pay for health, vision, dental, etc., etc., all nicely laid out. (No wonder they went paperless.)

Most of this wasn't the federal government's affair. Now it is.

Currently those benefits are not taxable. In fact, during the '00s employee compensation actually soared. We hear about wages being fairly level, or all the wage increase going to the top 5%. Include health benefits and you'll see a good increase for the middle class. The fact that such compensation is non-taxable made it cheaper for employees: You can give a $1000 increase in paid benefits or you can give $900 in cash for the employee to purchase his own insurance. Gee ...

But I don't think the OP answers the question. He gives an answer, but I don't think it's necessary or sufficient as an answer.

You can pay a relatively small amount and get nothing or pay a larger amount and get something. ACA expects you to pay more, either way. That's a cost of doing business. There are subsidies, but the details are things that I've seen nobody delve into because there are dozens of them that interact in unknown ways; in many cases there's no court precedent to say how the law's going to be implemented and in many cases there aren't regulations to provide the basis of legal action to provide precedent. In other cases, it's clear: There's a percentage of businesses, not all of which are massively profitable, that will have increased costs. In some cases, they have substantive competition from large companies or from overseas, and to raise their costs means bankruptcy.

Then there are the inevitable changes in rates, providers, and coverage. My employer's largely complied. I know one guy with 10 years' experience who quit as the new coverage went into play. It was more expensive and since there was no corresponding salary increase he viewed it as a pay cut. Already strapped for money, he said he had no choice. He couldn't afford his public-service job and the ACA. Out of the 300+ employees where I work, I know perhaps 15 of them well enough to discuss salaries. I don't know if 1/15th quit or if he was alone.

[SunSeeker]

11. Eye opening. Thanks for the post. nt

[Sancho]

12. It's even more devious here in Florida....where

almost every business hires undocumented workers. If they show up at the hospital or doctor without an insurance plan, the employer will be caught hiring them illegally. With the ACA, they have to be covered, but someone has to be paying on a regular payroll. All these hotels and Walmarts and boat builders will have to pay SSI, insurance, and minimum wage too.

[NNN0LHI]

13. Another similar scam around here is this one

I have known some doctors and dentists who put their entire family on the payroll as office workers. The wife and kids all drew a paycheck and had medical insurance though the office. None of them ever actually worked a day in their lives. But they always received a paycheck and paid into Social Security and Medicare so they had those benefits when they needed them.

Don

[SickOfTheOnePct]

20. Undocumented workers don't have to be covered under ACA n/t

[Stratosgc]

15. A case of corporate ethics

I worked for a small company 16 years ago and was on the management team tasked with selecting a new health care provider. The company was very profitable because it took good care of its' employees. We had companies come it and pitch their deals. The cheapest insurance company had a sweet deal but told us we had to fire three employees with chronic health issues. The management team threw those bastards out.
That company has been sold and resold several times in the last 16 years and the ethical attitude toward its' employees is long gone. So is its' profitability and reputation with the few customers it has left.
The problem with ACA and small businesses is that it will force the unethical small businesses to take care of their employees. This will level the playing field for the ethical companies, and that is a good thing.

[Fawke Em]

16. I don't know how long ago this was, but I call BS on it, now.

My husband sells insurance: all kinds, including health. He has never once offered an employer free trips to sell a policy.

My hubby gets some SPIFFs, but all salespeople earn SPIFFs. That's no different than any other company.

FWIW, hubby knows his health insurance business will go away. After the exchanges, most of the brokers will be cut by the insurance companies. However, he also does life, auto, causality, mortgage, etc., so he's OK with it.

[NNN0LHI]

17. Yea, I didn't expect a lot of business owners or insurance brokers to post here, "I do that too."

[lunatica]

18. I often wondered why employers weren't the ones bitching the loudest

Thanks. Now I know.

[Raine1967]

19. Kick -- Good information.

There are a lot of people that don't like a light to be shed upon shenanigans. I missed this thread yesterday. Glad it was brought to my attention.

[joshcryer]

21. This is fucking brilliant. Holy shit. Whoever thought of adding this is a genius.

Thank you for posting this Don! Brilliant!

Sorry for the excessive language I just was shocked.