I spent three of the last four days giving a seminar on the economic and tax effects of ObamaCare in Yakima, Kennewick and Boise and it was interesting to hear the feedback from farmers and other business owners. The first two days, the audience wanted to know my opinion on what would happen if Romney won the election. I think the answer would have been the same as what actually happened.
With the Senate still in Democratic control, there would be no change for at least two years. Now that we have a status quo election, it will be around for at least four years. Some of the unexpected consequences of this legislation (even though there is at least a year to go for penalty provisions) are:
- Lower income workers in retail, farming, hospitality, etc. will most likely need to work at least two jobs to make a living. These employers will no longer allow these workers to have more than 30 hours of work per week. Therefore, these employees will need to two jobs to have a chance at making a living.
- Many owners may consider transferring enough ownership to prevent combination of entities into one “employer” for tax purposes. This may be a good thing. It is much tougher for farmers due to family relationships.
- Many employers may bump up the amount of self coverage that they pay for, but may eliminate or substantially reduce family coverage.
- Many employers may eliminate health insurance coverage completely. This will place these employees into the “public” exchange plan. Employers will consider this since it may be substantially cheaper to simply pay the penalty and adjust pay for upper level employees.
- Tennessee had a plan similar to ObamaCare and the plan got so expensive that they had to cancel the plan. My worry is that this plan will get this expensive, but may be too late to cancel.
We shall see.
Paul Neiffer, CPA
Tags: Obama Care