Wednesday, July 18, 2018
News Roundup

Tampa Bay area businesses offer mixed reaction to court's decision on Obamacare

It's too early to know the full impact the federal health care mandate will have on Florida businesses, but the U.S. Supreme Court's decision Thursday in support of the plan has many companies worried.

Business leaders, company owners, lawyers and doctors pored over the almost 200-page decision to figure out how it will affect them and their clients.

Though some believe the health care plan will reduce costs in the long run, others speculated that it threatens the financial viability of companies still struggling through the fragile economy. Several businesses contacted by the Tampa Bay Times on Thursday hadn't heard about the ruling and were only marginally aware of the overall law.

The requirement that nearly all Americans obtain health insurance by 2014, some business owners say, could prompt part-time employees who lack insurance to leave their employers for full-time jobs or erode the narrow profit margins of some small firms that must begin offering coverage.

"You're going to see a lot of mom and pop shops going out of business," predicted Jessica Schweitzer, president of Servpro of South Tampa, an emergency and disaster cleanup company.

Rick McAllister, president and chief executive officer of the Florida Retail Federation, said the law constrains employers in management of their budgets and that could hurt their businesses. Even large employers, McAllister said, will face challenges meeting the needs of part-timers in particular.

"On a number of different levels, philosophically our members believe that the federal government should not be involved in this," said McAllister, whose organization represents 7,000 businesses. "The larger members … will have to do some soul searching."

In its 5-4 decision, the Supreme Court upheld key parts of the Affordable Care Act, a signature policy of President Barack Obama's administration. Employers required to provide insurance coverage for their employees but who fail to do so would face financial penalties.

Supporters of the health care plan said much of the concern that the mandate will destroy businesses is misplaced. They say small businesses can apply for subsidies to ease them into the system and companies that already offer insurance to their employees will over time benefit from universal coverage.

For example, St. Petersburg City Councilman Karl Nurse, who owns the 32-employee Bay Tech Label Inc., noted that emergency room costs at Bayfront Medical Center run $20 million a year for patients who cannot pay for the services.

That money, Nurse said, has to come from somewhere.

"That cost is shifted to everyone who does have health insurance," Nurse said. With the health care plan, "you reverse that shift. And you get people going to doctors' offices rather than emergency rooms.

"In the long run it should be good for health insurance costs for people who are already buying health care," he said.

Jim Kennedy, an attorney at Carlton Fields in Tampa, said the issue was drawing "mixed reviews" Thursday from hospitals, physician groups and clinics he represents.

On the one hand, more people will be insured, so many in the hospital industry believe it's more likely they'll be paid for services that they previously rendered without being paid, he said.

On the other hand, there's already a shortage in physician care so heightened demand could overload the system.

Kennedy said he wouldn't be surprised if some small businesses decide that health care costs have become prohibitive and that it's cheaper to pay a fine for noncompliance.

But it's too early for many to draw that conclusion, he said, because the eventual cost to employers for providing coverage is still unknown.

"So much of the Affordable Care Act is driven by the phrase, 'The Secretary shall write the rules…' so until we see what those rules will be, it will be hard to put a lot detail" on costs.

Bill Herrle, the Florida director for the National Federation of Independent Business, agreed it is too early to tell exactly how the law will impact small businesses. But he said he believes job cuts and reduced benefits are inevitable. Until the law is fully implemented, it is hard to predict how businesses will have to comply and what the tax will actually amount to. For many businesses, it will require professional help to figure out, he said.

"Small business owners are first going to have some very big bills to pay to their (accountants)," Herrle said.

Even for some company and business owners who did not like the law, Thursday's ruling offers an end to some of the uncertainty. More than half of the Greater Tampa Chamber of Commerce members had hoped the court would throw out "some parts if not all of it," said president and CEO Bob Rohrlack.

"But now it's in place," Rohrlack said, "and most companies I hear today are saying, 'We know what we have to do now so let's move on.' "

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