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Posted at 03:39 AM ET, 07/02/2012

Small business opinion: Jobs now, health care later

As the CEO of Consero Group, a small business in the executive events industry, I feel strongly about the company’s responsibility to provide a subsidized health care plan to our staff. 

While Consero’s employees are a fairly healthy bunch, they ought to protect themselves with health insurance, and I consider our facilitation of that effort to be part of the duty of care we owe them.  For that reason, I am generally supportive of the Patient Protection and Affordable Care Act.  And as a former practicing lawyer, I think that the Supreme Court’s recent 5-4 decision upholding the law was legally sound.  But given the current fragile state of the economy, and the persistence of high unemployment, I wonder if this may be the wrong time for the burdens that the law imposes on fast-growing small businesses.

 The law offers some valuable benefits to very small businesses, including tax credits for some companies that offer insurance to staffs of fewer than 25 employees.  These credits reduce the burden of providing insurance to a mere administrative headache, making it much easier to protect employees.  As companies cross the 25-person mark, those credits evaporate, leaving the law with virtually no impact.  However, as companies expand to the 50-employee level, the law requires them to provide affordable and sufficiently comprehensive insurance or pay stiff penalties.  The net result is a very real disincentive for certain companies that are off to a fast start to continue hiring aggressively.

 Like other start-ups, Consero is on a mission to hire more staff.  We have plowed virtually every dollar of would-be profit into new employees, and we’re rapidly heading closer to the 50-person threshold.  Because we provide subsidized health insurance, I do not expect the PPACA to impact our business.  However, for other growth companies with financing concerns or too little risk tolerance to put expensive benefits in place ahead of profit, the law offers a significant additional roadblock on the path to success.  To be sure, were our company not already providing insurance, I might think twice about hiring that 50th employee until we had strengthened our income statement.

 With unemployment above 8 percent, our economy needs to put people to work.  The Obama Administration has provided valuable support to start-ups, which are a great source of new jobs.  However, the PPACA offers a significant additional obstacle to the success of the nation’s fastest-growing businesses — generally those that are contributing jobs to the economy at the quickest pace. 

I suspect that most of the CEOs of those companies would agree that the PPACA and its requirements for companies with more than 50 employees are good for America, but that this moment in the nation’s economic recovery may be too soon.

Paul Mandell is chief executive of Consero, an event development firm in Bethesda.

By  |  03:39 AM ET, 07/02/2012

 
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