Congress Considers Revisions to ACA to Help Small Businesses

Attempts to repeal a tax on insurance companies in the new healthcare reform law are picking up steam in Congress, driven by worries that the fee would affect small businesses especially hard.

The legislation would get rid of the fee on health insurance companies set to go into effect when the law does in January 2014. Referred to as the health insurance tax (HIT tax), the fee will be calculated based on the plans insurers sell right to individuals and companies, known as the fully insured market, but doesn’t include plans established and managed by companies themselves, known as the self-insured market.

The majority of big companies self-insure their workers; as a result, experts forewarn that insurance companies will pass the added costs of collecting the fee to small businesses, which are inclined to buy coverage in the fully insured market.

“It’s pretty straightforward, what’s going to happen, that the tax is going to be passed along,” Rep. Jim Matheson (D-Utah) said in an interview, observing that insurance agents and underwriters have told him as much. “It isn’t really taxing the insurance companies, it’s taxing the people paying the premiums, and in this case, that’s small business owners.”

Matheson is one of several democrats who have pledged their support to the legislation repealing the HIT tax, uniting with almost every Republican in the House. Recently, the bill, H.R. 763, hit the 218-cosponsor mark, which is enough to guarantee its passage in the lower chamber; the tally has since increased to 221.

Sam Graves (R-Mo.) attributed the bill’s momentum to trepidations expressed by small business owners, including many who have testified during hearings before the House Small Business Committee, over which he officiates.

“We keep hearing that from small businesses; that they’re premiums keep going up, keep going up, and now this thing’s coming along, and they’re going to go up even more,” said Graves. “That’s the reason you’re hearing so much about this tax and why you’re seeing such bipartisan efforts to repeal it.”

Those efforts, however, are fighting against the political current on the Hill, where lawmakers have been reluctant to consider proposals to modify the health care law.

This hasn’t discouraged small business advocates from pursuing small fixes, and their efforts are starting to yield signs of progress. Recently, Sens. Susan Collins (R-Maine) and Joe Donnelly (D-Ind.) introduced legislation that would change the health care law’s definition of full-time employee from 30-hour workers to 40-hour workers, a shift meant to keep labor laws more steady for businesses.

Business Cash Flow Crunch? 5 Small Business Cost-Cutting Solutions

Cash flow can be a big problem for a small business. Here are some tips on how to minimize costs for your small business while maximizing efficiency and making the most of your money.

1. Utilize Combined Purchasing Power
By reaching out to other small businesses and joining together to buy supplies, your collective purchasing power is more desirable to suppliers. Going to the suppliers as a cohesive unit and stating the businesses’ intentions of buying from the vendor who offers their goods at the best price, will make the group more likely to get a more competitive rate for the supplies, especially if the consortium signs an exclusive agreement with the vendor for a longer length of time. Getting supplies this way may also make it easier to ask for a discount and save your business even more cash.

2. Embrace the Idea of Interns
When a business looks to temp agencies for a person to complete more mundane tasks or help out at a company, they miss out on the beauty of offering an internship. There are numerous college students looking for opportunities and experience, many of whom will work for low wages or use an internship to earn college credit. Interns can be trained to contribute more to the business or be delegated undertakings such as filing, stuffing envelopes, or doing supply inventory. Many in this college-age workforce are also adept with technology and could help with your company’s website or social media reach, as well.

3. Go Green
Nearly half of office paper is thrown out within 24 hours of being printed. The amount of money spent on ink, paper, and professional printing could be better used within your company if you adopt a paperless workplace. Using electronic file storage and free online spaces like Google Docs or DropBox eliminates the need for hard copies of documents floating around the office and will save your company hundreds of dollars as your small business cuts back on printing and ink costs. Using laptops instead of desktop computers can also save you money as laptops use significantly less energy than a typical desktop PC. Additionally, buying appliances that are energy-efficient is also a great way to go green. While you may shell out more for the merchandise up front, in the long run, a more energy efficient product will save you money.

4. Reconsider Your Office Space
While paying rent is inevitable, subletting office space or moving your office to an industrial area rather than maintaining an office in commercial space can cut down your company’s costs. Considering establishing your business as a virtual presence is a viable option too; your employees can then work from home and you eliminate the need for office space entirely. If this isn’t a possibility for your business, try renegotiating with your landlord – with a low demand for office space, your landlord may be more accommodating with the rent to keep you as a tenant.

5. Pump Up Your Advertising
Getting the word out about your business and attracting new clients and customers can be expensive but focusing your marketing and advertising efforts online can save you money and have a far reach. Connecting with potential consumers in online forums and message boards or starting a blog lets your business advertise and publicize itself for free. Another possibility for free advertising is to reach out to clients and ask them to write a testimonial on your business’s website or tell their friends about your company – word of mouth can go a long way and serves as free PR for your corporation.

If slow paying customers or unexpected growth create cash flow challenges for your business despite your best cost cutting efforts, invoice factoring is the solution. PRN Funding partners with a wide network of experienced business factors who work with nearly all industries including staffing, transportation, construction, manufacturing, telecommunications and more. We can help get your company funded today!

Not Supporting Small Business is Bad for the Economy

In the wake of the fiscal cliff debates, some are worried that big government is overlooking the little guy. According to Yahoo! Small Business, several leading business observers are criticizing the Obama administration’s treatment of small business.

Lloyd Chapman, President of the American Small Business League, recently posited that the government’s plan to fold the Small Business Administration (SBA) into the Commerce Department to try and save money is a folly. He is of the opinion that the merger would ultimately hurt small businesses and redirect money towards large corporations. He suggests instead that the SBA be strengthened and federal programs be directed towards the nation’s leading jobs creator.

Jim Clifton, CEO and Chairman of Gallup research, says that the continuing recession is the fault of elected officials who are not focused on creating wealth. He argues that they do not understand how important small business is, nor how crucial support is for small business success.

Small business is crucial to a functioning economy- but just how crucial remains to be seen. In the coming months and year, we will see more than ever the wide ranging effects of supporting or hindering small business success.

For the full article, see Not supporting small business is economic suicide, observers of economy say

Small Businesses Unsure How Affordable Care Act Impacts Them

According to eHealth’s Fall 2012 Small Employer Benefits Survey, small businesses are confused when it comes to the impact of health care reform. In her article Health Care Reform: Myths and Realities, author Maria Valdez Haubrich lays out the facts for small business owners unsure about where they stand when it comes to providing insurance to employees.

  • Employers with 50 or fewer full-time employees are not required to buy health insurance for them.
  • Employers with 50 or fewer full-time employees don’t face any tax penalties for not providing health insurance.
  • Those with 51-199 face $2,000 for every employee that gets insurance through an exchange, except for the first 20 who do so.
  • Health insurance exchanges are to be created in every state by 2014, which will allow employees to buy subsidized insurance even with a pre-existing condition.

So what does this mean for small businesses? It means that for the smallest firms, health care reform really won’t have an impact at all on their bottom line. Medium-sized companies, however, will be subject to the mandate and might face higher costs of doing business, which could lead to them looking for sources of financing and cash flow such as factoring.