How will small firms handle Obamacare?

By Don Loepp
Editor

Published: July 6, 2012 6:00 am ET

Some readers are tired of stories on Obamacare, the Supreme Court decision and politics. If this describes you, feel free to stop reading. But interest remains high for many Plastics News readers. For those of you — apparently the majority — who are fired up about the issue, let’s keep the conversation alive.

It seems to me that large companies already have a plan in mind to deal with the federal government’s new, larger role in health care. But what about the many smaller companies that have been sitting on the sidelines, waiting to see how the Supreme Court would rule?

My colleagues at Workforce Management magazine touched on the subject in a recent news story, which looked at how human resources leaders were scrambling to react to the court’s decision.

The story, by senior writer Rita Pyrillis, focused on a plastics injection molder, but I imagine it’s pretty typical for a lot of manufacturers: “I was hoping, really hoping, but I was not confident that it would be overturned,” Diane Harrington, human resources director for Otto Environmental Systems North America Inc. in Charlotte, N.C., told the magazine. “There are just too many liberals on the court.”

Harrington said she is worried about the impact the law will have on her 325-employee, self-insured company’s bottom line.

“With future cost increases, Medicaid expenditures and all the additional employees we will have to cover, there’s this fear of the unknown,” Harrington said.

The story also quoted Dan Levin, an actuary with Buck Consultants in Chicago, who said employers will now decide whether to continue providing health-care benefits based on their industry and the size and nature of their workforce. Smaller employers will be more likely to stop supplying their employees with health care, he said.

“It’s very expensive to insure people in a smaller market and it just makes more sense to get out,” Levin said. “So [some will] pay the penalty and give [their] employees some money to purchase insurance on the exchanges. But the larger the employer is, the more inertia there is. If you had [health-care insurance] all these years for all these employees, it’s not so easy to eliminate your plans.”

The plastics industry is populated with thousands of small employers — the kind Levin is talking about. Will many of them drop health insurance plans in the wake of the Supreme Court decision? Or will they wait to see how the mandate will impact their bottom line?

Small manufacturers may be torn in two directions on this issue.

On one hand, they want to watch the bottom line and make sure that they’re competitive — not just in North America, but globally.

But on the other, many companies face serious issues attracting and retaining talented employees. We keep hearing that manufacturers have a tough time convincing young people that there are good factory jobs out there — steady jobs with a future. Offering good pay and benefits can help on this front.

With a national election just over four months away, I don’t expect any bipartisan agreement on health care — or anything else, really — through the remainder of 2012.

Loepp is editor of  Plastics News and author of “The Plastics Blog.”


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How will small firms handle Obamacare?

By Don Loepp
Editor

Published: July 6, 2012 6:00 am ET

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