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Sunday, December 30, 2012

Small Businesses Fighting ObamaCare

The mainstream financial media is already out with articles suggesting ways for small businesses to circumvent the costly burdens of the Patient Protection and Affordable Care Act (which you and I know as ObamaCare).  However, the anecdotal evidence of these survival strategies gets really interesting.

Perhaps the most obvious trigger of the ObamaCare mandates on businesses to provide health insurance to employees is the headcount, that is, the number of employees a business has.  Here, the tragic number is 50.

In Manhattan, I do a lot of walking around.  The reason is that walking -- or running -- allows me to avoid cross-contamination from unclean surfaces and, in particular, unclean people.  In the process, I will sometimes step into a food establishment, and I enjoy going into the so-called mom-and-pops.  I get a different read on the economy than I do when I enter a chain store like the ubiquitous Qdobas, Chipotles or -- heavens forbid -- Starbucks.  

A glance into the so-called independent stores began to spark in me a curious sense of deja vu.  As in, I've seen this food before, the same display, the same rotating LED screen.  Soon, I've discovered that many purported independent stores are connected and must have some common ownership or management; certainly, drilling down several layers uncovered circumstantial evidence (which I won't disclose) indicating that there's either one heck of a coincidence, or a concerted effort by a big group to separate each of more than one dozen establishments into individual companies, each likely with fewer than 50 employees and hence avoiding the ObamaCare employee trigger.

Arguably, this could be construed as an evasion of the law.  The regulatory and even prosecutorial decisions starting in 2014 may be very interesting (or terrifying).  The situation bears watching.   As the legal and financial burdens mount, expect more efforts by business owners and managers to respond -- with cost cuts, staff reductions, store closings and other legal maneuvers -- in order to compete and preserve their slim profit margins and competitive positions in an uncertain and what some fear will be a possibly hostile-to-business second term Obama Administration.

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