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I am trying to understand the nuts and bolts impact of Healthcare Reform on the small business that I manage.  This is a dental office that is incorporated.  The 2 doctors are the owners of the business.  Unfortunately, they are both Republicans, one more rabid than the other.

I'm sure I am not the only one that deals with a boss who is a great guy in all but one respect.  He is a Limbaugh devotee, conservative, right wing nut job.  At the same time he is a very intelligent, well read, deep thinking, caring, articulate middle aged man.  

He has started a fear mongering campaign in our office targeting the young women who have insurance through the company and are living pay check to paycheck, all 3 with kids.  His tirade includes, better get all your needs met this year because the way things are going  we won't be able to afford insurance next year.  He's convinced that the insurance companies will skyrocket premiums in advance of the exchanges being available, and to be honest, I fear that too.

I am in charge of procuring, evaluating and implementing the healthcare insurance for our office.  Over the past 8 years that I have been managing our cost for health insurance has gone up 100%.  About 6 years ago we had a huge 32% increase that led us to change to a different insurance.  We are in Washington State and have limited choices for small business.  We brought the cost back in line for that year and even reduced our cost.  The policy was more restrictive, needing a primary care provider to OK any specialty doctors visits.  

Each year the cost of this policy has increased to the point that 2 years ago we were forced off of that policy and onto a different policy with the same company.  To be honest, the coverage was better and we paid less the first year.  Then, you guessed it, 28% increase last year.  This past renewal was a modest 6% increase.

We have the 2 Doc's and 5 employees on the policy.  One Doc has his wife and 2 kids added and I have my spouse added.  I pay for his policy as a deduction from my check. The policy is only available to full time employees as the insurance company requires that the company pay at least 75% of the policy cost.  We have 4 other employees who work a variety of hours from 1-3 days as 4 days is considered full time in our office.

I know that there will be tax credits for some small business, but I'm having a hard time finding out if the corporate officers (the 2 Docs) are considered employees or owners.  It will make all the difference as to whether we qualify for tax credits.  For labor laws and some other government agencies the corporation is the employer and the Docs are considered employees of the corporation.

They make plenty of money and if the threshold  average of $40,000 for all employees included them, there will be no credits due them.  On the other hand, if they are the employer, they would be in line for some relief.  

Before I go shoot my mouth off to him I need to know the facts.  Anyone have any facts they would like to share?

Originally posted to Reetz on Tue Mar 23, 2010 at 08:00 PM PDT.

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Comment Preferences

  •  Tip Jar (1+ / 0-)
    Recommended by:
    chparadise

    "My brothers keeper"

    by Reetz on Tue Mar 23, 2010 at 08:00:10 PM PDT

  •  Tips Jar for Truth in Healthcare Reform (0+ / 0-)

    "My brothers keeper"

    by Reetz on Tue Mar 23, 2010 at 08:00:15 PM PDT

  •  Dude, if the doctors don't know their status (0+ / 0-)

    they need to hire a lawyer fast.  You have bigger problems than insurance.  

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White

    by zenbassoon on Tue Mar 23, 2010 at 08:37:45 PM PDT

  •  As to status, it's a question of state law. (0+ / 0-)

    Generally, small corporations are owned by one or more shareholders. They influence the Board of Directors (and usually are part of it), who hire the corporation's officers who hire the day-to-day managers (like you).

    In my experience, it is routine for the shareholders to "elect" themselves to be members of the Board, and in that capacity then hire themselves as managers.  They can thus wear three hats (Shareholder (owner), Board member, and employee). The incorporation laws of your state contain the specifics on how this should be recorded with (usually) the Secretary of State.

    It is also my experience the originators of small   corporate entities like yours routinely don't "behave" as a corporation as specified in state incorporation law (e.g. Regular Director meetings, archived minutes of same, comingling corporate and personal funds, etc.). This is can be problematic in several circumstances, now possibly including HCR.

    Further complication is how your docs are renumerated. if the Board "hired them" and pays them from revenue just like they do you, they're probably bona fide employees. However, in a Subchapter S Corporation, all net income flows through the corporation to the shareholders, who have a different status than employees.

    In sum, sounds like you need to understand your corporate arrangements, then seek advice from your corporate CPA and lawyer.  Many of the HCR provisions don't kick in for 6 months or so, to provide time for the rules you're asking about to be written (since to Bill itself doesn't do that).

    If your usual renewal period is in November, tighten your chinstrap.

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