Executive Director, NFIB/California
Tell us about a little bit about your organization.
The National Federation of Independent Business is the state and nation’s leading small business association. In California, we represent more than 19,000 small and independent business owners, many with fewer than 10 employees.
Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information about NFIB is available online at www.nfib.com/newsroom.
How do you see the health care reform act impacting small business in California?
The biggest concern for small businesses in the long and the short term remains the same: costs. Small business has long cited cost as its number one issue and sadly, there is little to nothing in the new health care law that provides permanent and long-term cost savings for small business.
We remain concerned that the regulatory process that has followed passage of the law could further exacerbate price increases, and overly burdensome regulations could threaten the ability of small businesses to keep the coverage they have today.
Without significant concentration on ways to bring costs down, increase competition and expand choices, small business owners will only find it more difficult and more expensive to offer coverage to their employees — the exact opposite of what they wanted from health reform.
What positive things are there in the health care bill?
The proposed health insurance exchanges could be a benefit if they are set up properly. They have the potential to provide some administrative and shopping benefits because small businesses are expected to have the ability to “one-stop shop” and compare plans that are available in the exchange, which can ease the administrative complexity they face in today’s marketplace.
What are you suggesting small businesses do to prepare for the impacts of the bill as it now exists?
1. Talk to your accountant: The new health care law affects businesses differently depending on a variety of factors including how your business is organized, how many people you employ, how many hours your employees work, how much you pay your employees, and whether or not you already offer insurance. This information will be critical to understanding a range of tax-related provisions — from the employer mandate to the small business health insurance tax credit. Be prepared to provide tax information to your accounting professional so they can help you estimate any potential impacts associated with planning and preparing for compliance with the new law.
2. Count your vendors: Beginning in 2012, you will need to start reporting all business-to-business transactions of $600 or more annually. This will require small business owners to obtain the Tax ID number for all vendors that they will be responsible for issuing a Form 1099. Keeping accurate records will help you pull together the information you need quickly.
3. Call your insurance agent or broker: If you are currently offering insurance, you should speak to your insurance agent or broker about potential changes to expect at your 2011 plan renewal. For instance, if you have an HSA, MSA or FSA, beginning in 2011 you and your employees will be prohibited from using these funds for non-prescription over-the-counter drug purchases — except for insulin. You may need to investigate alternatives or educate your employees about this change.
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