Unions Growing Skeptical of Affordable Care Act

Even though labor has been a major contributor to President Obama during his two election bids, there is a growing skepticism about whether or not the Affordable Care Act — often labeled "Obamacare" — will be a benefit to their members. CBS News reports:

Some labor unions that enthusiastically backed President Barack Obama's health care overhaul are now frustrated and angry, fearful that it will jeopardize benefits for millions of their members.

Union leaders warn that unless the problem is fixed, there could be consequences for Democrats facing re-election next year.

"It makes an untruth out of what the president said — that if you like your insurance, you could keep it," said Joe Hansen, president of the United Food and Commercial Workers International Union. "That is not going to be true for millions of workers now."

The problem lies in the unique multiemployer health plans that cover unionized workers in retail, construction, transportation and other industries with seasonal or temporary employment. Known as Taft-Hartley plans, they are jointly administered by unions and smaller employers that pool resources to offer more than 20 million workers and family members continuous coverage, even during times of unemployment.

The union plans were already more costly to run than traditional single-employer health plans.

But Obama's Affordable Care Act has added to that cost — for the unions' and other plans — by requiring health plans to cover dependents up to age 26, eliminate annual or lifetime coverage limits and extend coverage to people with pre-existing conditions…

Unions backed the health care legislation because they expected it to curb inflation in health coverage, reduce the number of uninsured Americans and level the playing field for companies that were already providing quality benefits. While unions knew there were lingering issues after the law passed, they believed those could be fixed through rulemaking.

But last month, the union representing roofers issued a statement calling for "repeal or complete reform" of the health care law. Kinsey Robinson, president of the United Union of Roofers, Waterproofers and Allied Workers, complained that labor's concerns over the health care law "have not been addressed, or in some instances, totally ignored."

Revenue Producers: Where They Are, What They Do

Sure, all businesses (or at least a very high percentage) are important contributors to society in some form or fashion. But for the sake of a research paper, the Kauffman Foundation identified Companies That Matter as the following: scalable, quickly reaching $100 million or more in revenues; generating jobs quickly and broadly; and disproportionate creators of wealth, directly through profits and salaries and indirectly through equity.

More from Kauffman on the research and what it found:

In the paper, "The Constant: Companies that Matter," Kauffman Foundation Senior Fellow Paul Kedrosky explores the rate and founding locations of companies in the United States that "matter" from 1980 to present.

"Companies unable to reach $100 million in revenues are still relevant to the economy," Kedrosky says. "But the $100-million firms meet an entirely different threshold that gives cities, states and countries an even greater economic advantage."

Anywhere from 125 to 250 companies per year (out of roughly 552,000 new employer firms) are founded in the United States that reach $100 million in revenues. The largest contributors, in percentage terms, are from the consumer discretionary and industrial sectors. Taking into account sectoral contribution to U.S. GDP, the information technology sector produces more $100-million companies than might be expected.

Geographically, the most productive region in terms of $100-million company production is the U.S. southeast (Georgia, Florida, Kentucky, Louisiana) with the Pacific region (California, Oregon, Washington, Hawaii) coming in second. Following closely behind are the Mid-Atlantic and Central regions. Most regions are balanced with regard to sector, except for the Pacific region, which produces only slightly fewer $100-million information technology companies than the rest of the country combined, most of which are in California.

The United States averages 20 technology companies founded per year that reach $100 million in revenues, 17 of which are in 7 states: California, Florida, Illinois, Massachusetts, New York, North Carolina and Texas. Of these 17, 4 are usually in California. However, in the 1990s, California's share of $100-million technology companies was around 35 percent. That share has declined to around 20 percent in recent years.

"Looking forward, we will most likely see even more changes regarding the locations and sectors of these companies that matter," said Kedrosky. "With the prevalence of lean startups, accelerators and fractional entrepreneurship, and the declining cost of company creation, entrepreneurship is less expensive and more widely available to prospective entrepreneurs."

Mobile Madness!

Digiday explains why smartphones and mobile devices are no longer wants, but necessities, in today's world. Here are 15 stats that all brands should know about mobile:

  • The U.S. is at 101% penetration. (CTIA)
  • 1 billion smartphones will be shipped globally this year. (Gartner)
  • Apple beats all other phone manufacturers in customer satisfaction for smartphones. (J.D. Power and Associates)
  • 59% of mobile users are as comfortable with mobile advertising as they are with TV and online ads. (InMobi)
  • 85%  of mobile users prefer mobile apps over the mobile Web. (Compuware)
  • 75% of Americans bring their phones to the bathroom. (11 Mark)
  • 15% have answered their mobile phone while having sex. (Wilson Electronics)
  • Mobile advertising revenue is expected to reach over $11 billion worldwide this year, up from over $9 billion last year. (Gartner)
  • Mobile drives 23%  of paid-search clicks. (The Search Agency)
  • Americans spend an average of 158 minutes every day on their smartphones and tablets. (Flurry)
  • 15% of mobile users prefer to check financial accounts on smartphones and tablets. (Quicken)
  • 42% of consumers using a mobile device while in-store spend more than $1,000. (Interactive Advertising Bureau)
  • Mobile now accounts for 12% of Americans’ media consumption time, triple its share in 2009. (eMarketer)
  • 39% of mobile users access social networks from their phones. (Business Insider)
  • Mobile commerce will account for 15% of total e-commerce sales this year. (eMarketer)

Hat tip to Chamber staffer Glenn Harkness for the story.

Want to Know What We Do? Just Ask Our Members

If you've ever wondered what exactly the Indiana Chamber does, just watch this video as some of our members explain what we're doing for them.

If you'd like to join 5,000 other Hoosier organizations (including businesses, non-profits, colleges, etc.) to help us help you – and receive many other benefits to add value to your membership — reach out to our membership team. Dues are likely much more affordable than you think — and are 89% tax deductible. Become part of the Chamber family today!

All in the Family: Bremen Company Offers Sage Advice for Family Businesses

I had the privilege of visiting Bremen Castings last week to interview the company for a BizVoice article. Having been a family business for seven decades, the company's executives know a thing or two about how to keep the lights on as time passes. Outlined on the Midwest Handling Wholesaler site, here are Bremen Castings president JB Brown's four gems to live by for family businesses:

  1. Honor Thy Father:  A large percentage of family-run businesses do not make it past two generations, so the key to longevity is ensuring the business is managed with effective leadership.  When there is a strong management team, a solid business plan can be implemented which takes into account the highs, lows and future direction and goals of the company.
  2. Cash is King:  Since family members are often the majority stock holders in a family business, strong cash flow is imperative to ensuring stocks (and voting power) stays within certain hands rather than being sold for a liquid dividend.  “No company is going to survive very long without generating a positive cash flow,” says Brown.  “We keep tight books and prepare for the hard times by getting ahead of the curve.”
  3. Instill an Estate Plan:  Some owners of family businesses become so engrossed within their companies; they forget to look at the big picture and understand how various situations can affect both the business and the family’s assets.  “A defined estate plan is essential for smooth functioning of both the family system and the business system,” adds Brown.
  4. Enlist Outside Expertise:  Although the brunt of the business may belong to the family, it is important to enlist non-family members onto a board of directors to help with important decisions regarding the company’s future.  An outside board can instill a sense of accountability and perspective on everything from conflict resolution to financial planning.

Health Care Reform: What Happens Now? (Seminar, ePub Can Help)

The Supreme Court has upheld the Affordable Care Act.  The Court’s decision means that employers are facing upcoming compliance obligations and important strategic decisions. Join us for a half-day seminar that will discuss the Supreme Court’s opinion and what it means for future compliance with the ACA. Among the topics to be discussed are:

  • The creation and distribution of the Summary of Benefits and Coverage
  • Form W-2 reporting obligations to disclose the cost of group health plans
  • New fees imposed on health plans for patient-centered research
  • New limits for health flexible spending accounts
  • State-based health insurance exchanges
  • Employer penalties for failing to provide minimum essential health coverage and effects on future plan design
  • The expansion of the Department of Labor’s audit program to include demonstrations of health plans’ compliance with the ACA

The Chamber will also soon be offering an ePub (onlne publication) to help you comply ($99 or $74.25 for members). Set for an October release, you can pre-order the book online.

Botht the seminar and the publication are put together by Ice Miller LLP.

Pres. Obama’s Health Care Plan in Limbo

Businesses everywhere are anxiously awaiting how the Supreme Court will rule on President Obama’s federal health care reform plan this week. The decision will have many ramifications for businesses — and could even force some to reverse adjustments they’ve been making since 2010. CNBC reports:

First, an important caveat: Most of the employer provisions of the health care reform law apply only to businesses with 50 or more employees. So, if your business is smaller than that, you’re mostly off the hook — and you won’t be required to provide health insurance to your employees regardless of what the court decides.

But if your company is larger — or if you’re already growing and expect to someday employ more than 50 people — there’s a lot of unsettled business. Bigger firms that fail to offer their employees insurance could wind up paying government fees, which would kick in when employees obtain insurance independently. At the same time, the law would create exchanges and subsidies for individuals who buy insurance on the open market, and would also expand the Medicaid program.

Of course, there are many other provisions and exceptions. For example, even though companies with more than 50 employees would be required to provide insurance, they would also be allowed to skip paying the $2,000-per-employee government fee for the first 30 employees who didn’t have health insurance. (If you’re having trouble with that exception, rest assured that we had to think it through a dozen times before it made sense, too.) The truth is that once you get deep in the regulations  —many of which haven’t even been written yet —nobody really knows how things will settle out.

The Individual Mandate

Most of the legal attention has been focused on the so-called "individual mandate," which requires people to purchase health insurance, either through their employers or on the market. It was this provision that garnered the most pointed questions from the justices at oral argument in March.

"Can you create commerce in order to regulate it?" Associate Justice Anthony Kennedy asked at the time, apparently trying to figure out how the United States could justify requiring people to buy health insurance under the Commerce Clause of the U.S. Constitution. He later added that he believed the government faced "a heavy burden of justification," and was "changing the relationship of the individual to the government."

Under the mandate, individuals who fail to acquire insurance would be subject to government fees — although the exact nature of those fees, and whether they would amount to taxes, penalties or something else — is one of the more esoteric but important issues in the case before the court.

Despite the 2,400-page law’s complexity, the possible outcomes really fall into three categories. The court could strike down the law, uphold the law, or strike down some provisions. If that happens, it’s most likely that the court would get rid of the individual mandate will while upholding the rest of the law.

Also, Barbara Lewis of Inside INdiana Business spoke with Ice Miller’s Greg Pemberton about the possibilities and what they mean for the business community.

Nearly 600 to Benefit From Insurance Refunds

Small businesses and their employees can certainly use some good news in these still unsettled economic times. It came for nearly 600 organizations and their workers from what might be termed a nontraditional source — the Indiana Department of Insurance (IDOI).

The relief comes in the form of $2.75 million in refunds from the subsidiaries (Time Insurance Company, Union Security Insurance and John Alden Life Insurance Company) of Assurant Health. The reason: the Assurant companies were charging small businesses rate increases since October 2010 that had not been approved by IDOI.

IDOI Commissioner Stephen W. Robertson says, "Small businesses everywhere already struggle to provide health insurance to their employees because of the cost. I am pleased we were able to negotiate a settlement that makes employers whole."

The reason for the problem, according to IDOI, which has authority from the Indiana General Assembly to review health insurance rates.

In reviewing rates, the Department considers the rate justification provided by the company and determines independently if the company’s filing is sound and justified. Because Assurant’s policy forms had been on file since 2007, Assurant believed that its renewal rates were not subject to review by the Department. After being contacted by the Department about its concerns, Assurant worked out this agreement which ensures employers will promptly receive refunds.

IDOI encourages consumers and business owners to visit the Rate Watch web site to monitor rate filings in order to be more engaged with the process, submit comments, budget and plan for health insurance costs. Questions or concerns can be addressed online or by calling (800) 622-4461.

Kudos to IDOI, as well as Assurant for doing the right thing when the problem was discovered. 

Chamber Urges Passage of Imperfect Smoking Ban Bill

Passing the statewide smoking ban bill would be a substantial step and offer Hoosiers protection from second-hand smoke in key public places, says Indiana Chamber of Commerce President Kevin Brinegar.

“House Bill 1149 would protect 95% of Hoosiers while at work and also allow citizens to eat at a restaurant without having to encounter cigarette or cigar smoke. What’s more, local communities would still be able to pass a more stringent smoking ban. These are all huge positive developments,” he declares.

“We strongly encourage legislators to carry through on the bill negotiated in conference committee and pass HB 1149.”

In reference to attempts to defeat the bill:

“To those seeking a total ban, the Indiana Chamber agrees that is ideal, but also not realistic. At this time, a bill is not going to pass that bans smoking in bars and taverns. The health of Hoosiers is too important to let this bill die yet again because the legislation is not perfect.”

The bill passed the House by a 60-33 vote last night, and moves to the Senate today for passage.