Volume 17, Issue 4- July/August2013

feature

Shot to the Heart
How the New Health Care Law Will Affect Window Film Companies

by Casey Neeley

“ETurn on any major cable news network and you’re likely to see some discussion about the legitimacy/benefits/unconstitutionality and more of the Affordable Care Act (ACA). While you’ve heard numerous debates about the toll it’s expected to take on businesses or the coverage it will provide for employees, you may not be sure how it will affect your business, let alone the window film industry as a whole.

Just as business sizes differ, so do the effects of the ACA. For businesses large and small, single location or chain, the impact of the law varies. To get to the root of what your business can expect to see when ACA takes effect January 1, 2014, Window Film magazine spoke to several industry members from across the nation to get their take on what health care reform will mean for their companies, and ultimately, the window film trade.

Did You Know? “Employers with fewer than 50 employees are exempt from new employer responsibility policies. They don’t have to pay an assessment if their employees get tax credits through an Exchange.” —HealthCare.gov

A Little Incentive “If you have fewer than 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35 percent (up to 25 percent for non-profits) to offset the cost of your insurance.” —HealthCare.gov

What About the Self-Employed Tinter?
Self-employed tinters with no additional employees may wonder how ACA will affect them. According Healthcare.gov, there are several options:

• If your state allows the self-employed to buy small-employer health insurance, then you have similar options as small employers. Find out if you qualify by visiting your State Department of Insurance.

• If your state doesn’t allow self-employed people to buy small employer health insurance, then you have the same options as someone buying an individual health insurance plan.

• If you’re self-employed and have bought health insurance, the cost of the health insurance may be deductible from your federal taxes.

Open Enrollment
“In 2014, small businesses with generally fewer than 100 employees can shop in the Health Insurance Marketplace, which gives you power similar to what large businesses have to get better choices and lower prices. In the Marketplace, individuals and small businesses can buy affordable health benefit plans. Open enrollment begins on October 1, 2013.” —HealthCare.gov

Pre-Existing Fees
Some companies may be impacted by fees associated with ACA, whether they realize it or not. In fact, the ACA includes a $63-per-head fee to “cushion” the cost of coverage for pre-existing conditions. The fee is temporary, raising $25 billion over three years, according to CBS News. Most of the money will reportedly go into a fund administered by the Health and Human Services (HHS) Department. —Tara Taffera

Offsetting Baby Boomers
“Under the health care law, employer-based plans that provide health insurance to retirees ages 55-64 can now get financial help through the Early Retiree Reinsurance Program. This program is designed to lower the cost of premiums for all employees and reduce employer health costs.” —HealthCare.gov

Small Business News
Tax Breaks Go Largely Unclaimed

While employers with fewer than 50 employees are not required to offer health insurance under the new health care law, the government does offer tax credits, in the hopes of enticing some employers to offer insurance.

The tax credit is available to “small employers” with fewer than 25 full-time equivalent employees who pay an average wage of less than $50,000 a year, and pay at least half of employee health insurance premiums, according to the Internal Revenue Service (IRS).

For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning January 1, 2014.

Surprisingly, the General Accounting Office (GAO) says fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible.

One factor limiting the credit’s use, the report continues, is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance. —Tara Taffera

The Effect on … One Distributor
Hugh Bernardi Jr., president, Interwest Distribution Co.
Denver, Colo.; Anaheim, Calif.; Chicago, Ill.
Employees: 22

Bernardi says window film companies are going to face some tough choices with the implementation of ACA. The biggest concern for companies with fewer than 50 employees is how to continue providing health care coverage while maintaining the bottom line.

“It’s a very relevant issue to all small businesses right now because it’s important to keep expenses down. Health care is a tough one because it’s rising by double digits every year. We don’t have a lot of control over that,” he says. “I think what we’re going to see is the atomization of the small group, or the micro-group world. It’s going to blow up. For companies with fewer than 50 employees, what most people think is going to happen is they are going to stop or start leading away from offering group coverage to offering individual coverage. It’s one of the individual consequences of health care reform.”

The guidance of a third-party brokerage firm has helped Bernardi weigh his options.

“We’re going to what are called employee benefit specialists, also called brokers. They offer services free of charge to both individuals and companies and basically [provide] navigation through health care coverage. That’s at no cost to the business or individual. They offer these plans paid by the insurance carriers. Essentially it’s their job to help individuals and companies navigate through health care so they can choose the right path to go down and decide whether they should go with group coverage or go down the individual path. We use the Wright Group Services; another group that does the same thing is Group Medical Marketing. They basically walk us through the different options we have and I choose what is best for the company and employees.”

For Bernardi, the choice was obvious. He foresees many companies moving toward individual-plan coverage.

“Not only is it less expensive to go toward individual but the government is subsidizing it,” he says. “If you’re an employee of a window film company you may or may not have coverage. If you go for an individual plan you’re going to get subsidized by the government … That’s a way to offer pretax subsidies to your employees, meaning you’re subsidizing their health care and, on top of that, you also get a subsidy from the government if you do an individual plan, so you’re kind of double dipping. The atomization of the micro-group world means that a lot of employers are going to move toward more individual coverage.”

The Effect on … A Dealer
Chris Robinson, owner/CEO, The Tint Guy
Atlanta, Ga.; Woodstock, Ga. Employees: 7

Robinson anticipates little change when ACA takes effect January 2014. “It’s not going to affect me much. In fact, it may make it easier for me to encourage my employees to get health coverage by making it more available,” he says. “Now, whether the Obamacare system works the way it was intended to work, I’m sure it’ll unravel some as it gets going but right now. We went from paying $2,000 to $3,000 a month for health insurance for our employees up to $5,000 to $6,000 in 2009. At that point we cancelled it and did away with it … Now everybody goes out on their own and gets it … It was a lot less expensive and I feel the coverage is just as good.”

Robinson says the political discord over the passage of the legislation has led to much of the misunderstanding behind the law.

“The problem is the political side,” he says. “You get a lot of small businesses more on the Republican side. You don’t know who to believe anymore. If you listen to talk radio, you believe that Obamacare is going to destroy small business. I’m probably as far from any individual political party as you can get now … I’ve never gone a day in my life without having insurance. I’m very proactive when it comes to insurance.”

To get a better understanding of the law and how it will affect window film businesses, Robinson says dealers need to do their own research rather than relying on various news outlets for information.

“I would say [dealers] need to really do their research. Take it firsthand; don’t just listen to the hearsay and the rumor mill … Striking fear into a small business owner is how some maintain power.

“Keep an eye on the changes that are coming. Small business owners will have access to better insurance and it may be a better way to provide insurance to our employees again to offset wages,” he adds.

As for now, Robinson says he’ll have to wait until the first of the year to know the full impact of ACA.

“I just don’t see any way that it’s going to affect me directly. It may affect me indirectly … it may affect the economy. It’s a wait-and-see thing. But the bill has already been passed and change will come in 2014.”

Is That It?
To put it simply, no. As the massive plan prepares to take effect, employers may still have additional concerns. For more answers on the Affordable Care Act, look to the Frequently Asked Questions section found on the Department of Labor site, which includes 15 separate FAQ sections to field the inquiries surrounding the behemoth bill. http://www.dol.gov/ebsa/healthreform/#acaimplementationfaqs WF


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