We’ve written recent articles on the problems small businesses may soon experience with existing health care plans as a result of the new guidelines put out by the Obama Administration. You can read these previous articles on two of Silkin Management Group’s blog sites: http://practicemanagementblog.blogspot.com/2010/06/new-rules-for-existing-health-care.html & http://silkinmanagementgroup.blogspot.com/2010/06/more-information-on-new-rules-for.html

The following is a short summary of this issue for anyone who hasn’t read what we’ve previously written and/or who is unfamiliar with this recent turn of events for small businesses with existing health care plans.

Under the new regulations, any business that has an existing plan will be able to keep their current plans as long as they don’t significantly cut benefits, raise co-insurance charges, or increase co-payments by more than five dollars. Such plans also will lose their status of being “grandfathered in” if deductibles are raised appreciably or if employers reduce their payments to employees’ premiums by more than five percent.

As mentioned in our previous blogs noted above, we are keeping an eye on any further updates and information about these new regulations as it affects Silkin Management Group clients with existing plans. Today I read an article in the Wall Street Journal that I thought I should pass along to any Silkin client or small business owner reading this site. You can access this article here: http://online.wsj.com/article/SB10001424052748703513604575311013340405940.html?mod=dist_smartbrief

This article points out another aspect of these new regulations that is not helpful for small businesses with existing plans. These new regulations could easily end up limiting what an employer can do about his plan costs and, at the same time, prevents him/her from getting a new plan at a lower cost because he/she would then lose the benefits from the “grandfathering” rights of existing plans.

As the article points out, “Many small businesses would like to keep their grandfathered status but can’t afford the premium increases. Benefits consulting firm Mercer LLC says increases are averaging about 10% in 2010, and a Deloitte LLP estimate puts the range between 11% and 15%.”

With premium increases happening now, small businesses are forced to make difficult decisions to control their costs, many of which may not comply with the new regulations and which could then result in losing their “grandfathering” advantages. Truly a lose-lose situation.

I suggest all Silkin Management Group clients read the attached article, as well as the previous articles noted in the blogs sites referenced above in order to stay on top of this issue.

Dave McKevitt
Silkin Management Group Consultant

For information about Silkin Management Group, visit our website at www.silkinmanagementgroup.com

Anyone who has been reading our various Silkin Management Group blog sites knows that we’ve been writing for months about various aspects of the health care reform bill and its effects on small business. (Silkin Management Group clients are all small businesses.)

Many of you may be aware that some states decided to sue the federal government in the attempt to get this legislation thrown out. Some of my Silkin Management Group clients were curious about this suit, whether it had any merit and, maybe most importantly, what the basis behind the suit was.

Along those lines today I found an interesting article that covers the basic philosophy behind the suit. I found it quite fascinating and wanted to pass it along to our readers. I think you’ll find it interesting whether you agree with it or not.

There are several points to the argument, but the most basic seems to be the following, as pointed out by the author of the article:

“At the core of the lawsuit is the requirement that all individuals purchase qualified healthcare or face a fine. Forcing individuals to purchase something simply because they are alive is unprecedented, and we believe ultimately unconstitutional. The military’s draft is the only exception to this, and Congress’ authority to enact the draft is explicitly provided for in the Constitution, unlike this mandate.”

I suggest Silkin Management Group clients and anyone else reading this blog site read the article and form your own opinion about this suit. The full article can be found here: http://njtoday.net/2010/06/16/why-small-business-joined-the-healthcare-lawsuit/

Bill Hickey
Consultant for Silkin Management Group

For more information about Silkin Management Group visit our website at: www.silkinmanagementgroup.com.

Part 2

Yesterday, on this Silkin Management Group blog site, which you can link to here: www.silkinmanagementgroup.blogspot.com, we discussed some of the aspects of the new health care legislation relative to how it affects group health plans. All of Silkin’s clients are small businesses and many of them have group plans. Therefore wanted to relay the information we have found on this aspect of the legislation.

Here are 5 additional points that are important to know if you have a group health plan:

1. You insurance company should provide you with a summary of benefits as you are required to distribute such a summary to all employees covered under your plan.

2. There are some preventative care benefits that are required to be covered 100 percent. Which ones? That is still being figured out although vision and dental exams for children might be included. Any plan “grandfathered” will have the same preventative care benefits until 2014.

3. Any employer with 25 or less employees with an average wage less than $50,000 per year may be able to use the tax credit to deduct up to 35% of the premium payments from their taxes.

4. Employers with 2 to 50 employees may be eligible for a federal grant program to help with providing wellness programs for their employees. The details of this are still being figured out.

5. Emergency services (the definitions of which are still being figured out) will be paid at the in-network level whether or not the provider is preferred or non-preferred. Grandfathered plans will continue with the same emergency services benefits until 2014.

Bill Hickey
Consultant for Silkin Management Group

Please visit our website at www.silkinmanagementgroup.com for more information about Silkin’s services.

On several of our Silkin Management Group blog sites, we’ve posted articles about what was once a hidden and unknown portion of the health care legislation that has nothing to do with health care. This hidden stipulation requires all businesses to file 1099’s for every purchase of over $600 with any and every company they deal with.

Besides the fact that this has absolutely nothing to do with health care, why the heck was this slipped into the legislation behind everyone’s back? The simple answer is that it is the government’s next attempt to find more money. Unfortunately for the government, this little “move” is no longer hidden and is causing quite an uproar.

In our past articles we’ve discussed a variety of ways that this activity will cause greatly increased administrative burdens to both small and large businesses. As Silkin Management Group clients are all small businesses, we felt it important to keep everyone educated on this matter.

Today, I read maybe the best write up of how intrusive this legislation will be. You can link to this article here: http://www.naturalnews.com/028854_1099_small_business.html

As the author points out, “Remember: The new law will require 1099s to be issued to both individuals and corporations. This means that a musician who buys an expensive new guitar will have to send the retailer a 1099 at the end of the year for that purchase. A florist will have to send 1099s to each of her suppliers as well, including the flower growers, the ribbon company and even the place where she buys tape and scissors if those purchases exceeded $600 throughout the year.”

“Can you imagine having to track and tally every single business purchase you make throughout the year and send 1099 forms to all of them? How about having to collect names and taxpayer identification numbers from every vendor or payee that you dealt with? Can you imagine how long it would take on the phone with Wal-Mart customer service to try to obtain the company’s tax ID? Multiply this by the other five hundred companies you do business with, and you start to get an idea of the new burden this is going to place on small businesses across America.”

Read the whole article and you’ll find it eye opening, or should I say eye popping.

You can be pro-active about this by writing your Congressman and Senator about this absurdity. Maybe someone will listen.

Jack Hennessy
Silkin Management Group Consultant

For more information about Silkin Management Group or Silkin Management Group’s services, visit our website at: www.silkinmanagementgroup.com and/or email us at: info@silkinmanagementgroup.com.

Who do you think are the most trusted institutions in America? Or the least trusted? (Unfortunately, attorneys are not considered an “institution” or else we’d all know they’d be at the bottom of the list.)

What’s your guess? Do you think the entertainment industry rates higher or lower than the news media? Do people view the Obama administration as having a more positive or negative effect on the country than technology companies? How about small business versus big business…who do people trust more?

As Silkin Management Group consults and trains small businesses on management, we are proud to see that the most trusted institution in the country is small business according to the recently released study by the Pew Research Center. And who’s at the bottom? It’s banks and financial institutions with Congress right on their heels. You can read about this study in the following article from USA Today: Small Business Pew Survey.

As noted by the author of the article and according to Carroll Dougherty, Pew’s Associate Director. “At a time when a lot of institutions are viewed negatively, small business is viewed very positively. What’s really interesting is that large corporations are viewed almost as negatively as Wall Street. The contrast between large corporations and small business is enormous.” And this was a very bi-partisan response – 70% of Democrats, 72% of Republicans and 73% of Independents concurred.

Read the article, you’ll find it very interesting. Silkin Management Group clients who read it found it very supportive of the work they do. Below is the chart given in this article and taken from the Pew study. I think you’ll find it fascinating.

PUBLIC’S NEGATIVE VIEWS OF INSTITUTIONS

Effect on the way things are going in the country (in percent)

Pew Research Center March 11-21. Figures may not add to 100% because of rounding

Silkin Management Group consults and trains small business owners, primarily in the health care field. If you’d like more information about business or practice management or about Silkin Management Group and its services, visit our website at www.silkinmanagementgroup.com or contact us at: info@silkinmanagementgroup.com.

Larry Silver
President, Silkin Management Group

Small Businesses Still Have Many Unresolved Issues

We’ve been continuing to research and write about the ramifications of the new health care legislation on our various Silkin Management Group blog sites. Since all Silkin Management Group clients are small businesses, we find it vital to keep a close eye on how this bill will be implemented and how that will affect not only our clients, but all small businesses.

Today I read an interesting article which you can access here: http://liveshots.blogs.foxnews.com/2010/04/26/making-sense-of-the-new-health-care/?test=latestnews. This article covered an event put on by the U.S. Chamber of Commerce in which a panel of experts discussed the legislation.

This article points out the following key issues:

• Employers are confused about adding dependants to existing policies and how much that will cost them.
• Tax guidelines for employers and employees are unclear.
• Employers who have to make decisions about their health care coverage for the next year are in a precarious position as the Department of Health and Human Service has not yet issued many needed guidelines to facilitate the decision making process.
• Yearly caps on benefits are not resolved.
• What changes plans grandfathered from the new law will have to make to maintain exempt status.
• Tax reporting requirements for small businesses will add costs for small businesses.
• Requirements for tax credits are very limited.

The article also gave a great example of how a business could use the new law to stop paying health care insurance for its employees and save a large amount of money. But, by doing so, it will increase the federal government’s cost and, if enough companies do this, it could result in another underfunded government program. Here’s the example given in the article:

“Monday’s event included the release of a study sponsored by the Chamber analyzing the impact of the new law which its backers said would insure more Americans while containing costs. The report cited a small Philadelphia trash company that has 55 full-time employees and spends $600,000/year on health care costs. In 2014, if the company decided to drop its health plan, it would pay $50,000 in fines. In other words, the study shows, the company will save $550,000 by not offering its workers health insurance and forcing them to find insurance on their own.”

We will continue to research up to date articles and information about this legislation in the attempt to keep Silkin Management Group clients and anyone reading our Silkin Management Group blogs informed about the latest questions and answers regarding this massive piece of legislation.

Dave McKevitt
Silkin Management Group Consultant

For more information about Silkin Management Group and our services, visit our website at www.silkinmanagementgroup.com. You can also contact us at: info@silkinmanagementgroup.com.

What Is Going to Happen to Costs Between Now and 2014?

I’ve been wondering, as have some of our Silkin Management Group clients, what is going to happen to health care insurance premiums between now and 2014. Most of the regulations on costs and the implementation of health insurance exchanges don’t take effect until 2014. So what is to prevent, over the next 3 years, the continued escalation of premiums that we all have been experiencing over the last many years? Nothing, at this point.

A bill was recently introduced in the Senate by Dianne Feinstein to give the secretary of health and human services the right to review premiums and block any unreasonable rate increases. More legislation on this is being looked at as well.

At the same time, the insurance companies are stating that rate increases are caused by unchecked increases in prices that hospitals and other health care providers are charging, so limiting premium increases without addressing the underlying cause will be harmful.

If you or any Silkin Management Group clients are interested in learning more about this, I suggest you read the following article that was in today’s New York Times concerning this. http://www.nytimes.com/2010/04/21/health/policy/21health.html?th&emc=th. This article gives a good overview of what is being debated on this subject that can and will affect us all.

Jack Hennessy
Silkin Management Group Consultant

For more information about Silkin Management Group, contact us at: info@silkinmanagementgroup.com and/or visit our website at: www.silkinmanagementgroup.com. You can also call Silkin Management Group at 800-695-0257.

On our various Silkin Management Group blog sites we’ve written summaries of the effects that the new health care legislation has on businesses as well as provided links to other articles that help clarify this 2500 page piece of legislation.

I recently ran across another article from USA Today that was an excellent summary of the legislation and covers the following points:

• Insurance Exchanges
• Subsidies
• Medicaid
• Mandatory employer provided coverage
• Mandatory personal coverage
• Pre-existing conditions
• Adult children
• Lifetime limits
• Preventative care
• Taxes
• Cadillac plans

As Silkin Management Group is a practice management consulting and training company, we try to keep abreast of these issues, but we also know that we certainly are not experts in the area. Therefore we are always looking for well presented written articles by experts to pass along. This was one and can be found here: http://www.usatoday.com/money/smallbusiness/columnist/abrams/2010-03-26-what-health-care-reform-means_N.htm

We will be presenting information on these various areas over the next week to more closely inform any readers of the specific details on many of these areas. In the meantime, this article should be very informative to anyone wanting a good summary of the legislation.

Bill Hickey
Silkin Management Group Consultant

For more information about Silkin Management Group and its services visit our website at www.silkinmanagementgroup.com and/or email us at info@silkinmanagementgroup.com.

I’m sure by now there are but a few people in the entire country who haven’t heard that the health care bill passed in Congress and was signed by President Obama. In fact the people who haven’t heard about it are likely the people who will benefit the most as they are the uninsured.

As the clients of Silkin Management Group are all small businesses and, as a consultant for Silkin Management Group, I was looking for a good comprehensive summary of how the bill will affect most small businesses in the country. I found this article on “CNN Money.com for Small Business” and think it is a fairly easy to read and understandable summary of the bill and its impact on small business. You can link to the article here: What health care reform means for your business

The article points out that the bill will only very marginally decrease insurance costs for small businesses – between 1% and 4%. That’s nice but certainly no great shakes.

Another key point is that starting in 2014, if you have more than 50 employees, you will be mandated to have health insurance for all employees or pay a $750 penalty per year, per worker. There’s a couple of things I suspect could happen: a) since premiums are more than likely much greater than $750 per year per employee, I think you’ll find most businesses of this size paying the penalty due to that being a lower cost way to go, and b) any business that is nearing 50 employees will likely not be in any sort of hiring mode in order to avoid this cost. That’s certainly not a smart way to incentivize business growth.

As we teach our clients at Silkin Management Group: if you reward production you are more likely to get increased production, but if you penalize production/growth, you will very likely not get any increase in productivity. I think most business people have an innate sense of this basic management rule. Unfortunately the people who make many of the laws that affect business have no business experience and/or innate sense of what works in the management of a business. The above noted “de-incentive” is certainly a sign of this.

There are many more areas in which the health care bill impinges on small businesses and the article noted above provides a good overview of these areas. I am suggesting to my Silkin clients to read through it and recommend it to anyone reading this blog.

Jack Hennessy
Consultant for Silkin Management Group

If you’d like to find out more about Silkin Management Group and its services, contact us at: info@silkinmanagementgroup.com or call 800-695-0257. You can also visit our website at www.silkinmanagementgroup.com

Today, as part of my frequent review and reading of articles that will affect my clients at Silkin Management Group, I concentrated on what the latest was on the battle for passing the health care legislation that is being so fervently pushed by our President. In doing so I ran across this article in the New York Times: Millions Spent to Sway Democrats on Health Care.

The article points out that on one side we have a coalition of groups opposing the legislation, led by the United States Chamber of Commerce, putting up millions and millions of dollars ($11 million just this month) to sway the “on the fence” Democrats to vote against the bill, and on the other side we have the pharmaceutical companies and labor unions contributing equal amounts in the attempt to sway these same people to vote for the legislation. I don’t know about you, but whenever I see the “Big Pharma” people actively supporting something like this, I know that there is something big, in terms of big, big dollars, in it for them.

And, to put the icing on the cake, the article points out that, “The White House has signaled to lawmakers that assistance for midterm elections — for example, presidential visits and fund-raisers — will be prioritized for those who support the bill.” Hey, it’s the old “vote for my bill and I’ll help you get re-elected” ploy.

I’m sorry if I’m being unduly cynical but I can’t help but be that way when I see that a big part of the future of this country’s health care is being determined by who advertises the best and who can twist enough arms and promise the yellow brick road to re-election. It doesn’t give me a lot of faith in the system. But what else is new?

I’ll keep advising my clients at Silkin Management Group to manage their businesses in a manner completely different than how our legislators handle the fiscal state of the country. In other words, don’t spend more than you make, don’t go into deep debt and produce honest, worthwhile products for your customers and make them happy.

Gary Crawshaw
Silkin Management Group Consultant

For more information about Silkin Management Group, please visit our website at www.silkinmanagementgroup.com. You can access our Ask A Consultant feature there or email us at info@silkinmanagementgroup.com