An edited version of this blog appeared on Business Week, August 24th 2010

 

Well, another men’s over-40 softball season is over and my team performed as expected:  we were 3-15.  And I’m feeling every inning of those fifteen losses.  My hamstrings ache and my knees are throbbing.  I have a bruise on my right hand where I fell trying to catch a routine pop fly.  And I’m going to the bathroom a lot more in the middle of the night, but I don’t think this is softball related.  That’s right – my body’s going to hell.  And just when the new healthcare reform act is taking shape. Great timing!   I’m not sure if its provisions are going to help my sore back anytime soon.  But it’s definitely going to affect my small business, and many others like me, right away.  Business owners and fellow over-40 softball players:  are we ready? 

 

We better be…for more bureaucracy.  Think it’s fun filling out those W-2 forms at the end of each year?  Well, if you like that, then you’re going to love the new healthcare reform act.  That’s because starting in 2011 employers will need to begin reporting the healthcare benefits received by each employee on their W-2.  What?  You say you’re not tracking that information?  Well, we all better start.  We’ll need to make sure our health insurance providers are furnishing us that information.  Or we’ll need to track it ourselves.  And it better be right.  Because it’s our responsibility to make sure the numbers we’re reporting are accurate.  

 

Did I mention my back is sore?  That’s because of all the times I’ve been bending over to watch those ground balls skitter between my legs.  And now things are going to get worse.  Because I’m going to spend a lot more time hunched over my desk filling out 1099s.  You know what those are – the forms which report the amount of money you paid to independent contractors and self employed individuals over $600.  Beginning in 2012 we’re going to be required to send a 1099 to those guys….and everyone else who received more than $600 from our companies during the year.  And they’ll be sending us a 1099 form too.  Oh, my aching back! I don’t know the Employer Identification Number (EIN) or social security number of every vendor in our system, do you?  Well, we better start calling them.

 

 Don’t have the resources to generate hundreds of 1099’s every year?  

Then get ready to break your back writing more checks…to your accountant.  Wait a second…is filling out more 1099’s going to help our healthcare system?  No more than those shin guards our catcher insists on wearing even though we play slow pitch.  Look…it’s all just part of the game. And to play this game, I’m going to make it a point to have a heart to heart meeting with my insurance company.  That’s because I’m expecting yet another significant rate increase.  Is it because I’m seeing a physical therapist more often than my wife?  Or that I can now identify my urologist in a crowd just by looking at his index finger?  Oh yes.  As an over-40 guy, my health demands aren’t decreasing.  Yet the regulatory demands on the insurance industry are increasing.  If your business was facing an economic downturn, significant uncertainty in your industry and a government ready to unleash heavy fines on your business just because you have the audacity to earn a lot of money (plus you have to replace unhappy urologists who are forced to perform obscene procedures on over-40 guys like me) wouldn’t you be grabbing as much cash as you can while you can?  Exactly.

 

The healthcare reform act is requiring health insurance companies to step it up this year.  The law says they must now be providing coverage for dependants up to the age of 26.  And they must be providing coverage for people with pre-existing conditions, like an inability to hit a slow pitch softball thrown by a retired dentist.  So I’m damned well going to make sure my health insurance company is living up to its end of the bargain and offering these additional coverages to my existing and potential employees.  These benefits may not only help me keep my good people on staff, but offer potential employees an incentive to leave their previous employers and join me.  Maybe I can recruit a couple of guys who can catch a softball too!  And if my insurance company complains I may just report them to my state – because the new healthcare reform act is providing funding to certain states to investigate excessive premiums.

 

I’m going to have a heart to heart with my accountant too.  No - not because his base running is atrocious or his fielding stinks (the guy weighs 300 pounds and has diabetes for goodness sake).    It’s because the new healthcare reform act is offering some potential tax incentives for my business.    For example, there’s now a tax credit available for small companies with less than 25 full time workers who cover at least fifty percent of their employees’ health insurance costs.  The credit is 35% of our health insurance premiums and it’s slated to increase to 50% in 2014.  The benefits of this tax credit, of course, will be offset by my accountant’s fees as he struggles to figure out the calculation and determine how much of this credit begins to “phase out” under the law’s obtuse provisions.  But I’ll take what I can get. I’ll also look for a wellness grant too.  The new act gave the Health and Human Services department $200 million and the authority to award workplace wellness to companies employing less than 100 people.  To be eligible I should have no existing wellness program in place (check!) and would have to meet certain “health awareness” criteria (reminder to self:  remove beer from company fridge).  I’ll need to get my employees involved and “provide initiatives to change unhealthy behaviors and lifestyles”, like throwing tantrums on the softball field every time our center fielder drops a fly ball.

 

Finally, I need to start thinking about 2014.  Because that’s when the you-know-what is really going to hit the fan.  Our best player will be retiring to an over-55 community in Boca.  Oh – and that’s also the year when everyone’s going to be required to have health insurance – either on our own or through employers.  That’s the year when those mysterious insurance exchanges will be setup offering less expensive coverage for both individuals and small employers.  Will I continue to pay and provide health insurance for my employees?  Or will I scrap the whole thing, tell my people to get the coverage on their own, and pay the $2,000 per employee annual penalty.  What makes more sense for my bottom line?  For my employees?  For my company’s competitiveness? This is not a decision I plan on making in 2013.  I will need to choose a direction in the next year or two.  I’ll need to discuss this with my employees and make sure to help them with this transition.  I can’t just yank away their healthcare coverage on the last day of the year.  I have to give people time to adjust.  That is, if I want to keep my people happy.  Hey - maybe these new reforms can provide extra coverage so I can start taking steroids.  That’s pretty much the only way I’ll hit one out of the infield.

 

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