Health-care law is daunting: People & Companies

One question I’ve been getting asked a lot lately is, “How will the new health care legislation affect your shop?” I can’t answer confidently because I’m not sure. Even after talking with insurance and human resource professionals, an accurate assessment of what to expect isn’t easy to come by. My impression is those professionals are still trying to understand it themselves, and trying to explain it to a manufacturing company is a perplexing mess.

Nonetheless, they consistently expect the legislation’s impact to be more bad than good, more costly than less and more complex than simple. As if shop owners and managers didn’t already have enough to deal with.

At our company, we pay employees’ medical premiums and have for a few years, but I can’t guarantee that will continue. Perhaps the costs will become too high and we’ll have to pass on an increased share of the expense to employees. This means less money in their pockets—not a beneficial outcome. In addition, I’ve read that tiered plans allowing owners, managers and other employees a richer insurance package will be altered or disallowed, possibly removing another benefit.

After digging into the details, however, I’ve discovered many of the regulations don’t apply to smaller companies or otherwise-exempt organizations. This could include a sizable number of small machine shops, so some of the scary scenarios may not materialize. But these shops are still likely to pay higher premiums, and, for shops with 50 employees or more, the impact of those costs could be huge. Our company has 48 employees, as well as a few temporary workers, and I’m reluctant to add staff with such uncertainty.

One primary concern of mine is that a staff reduction will be necessary to remain competitive and profitable. It’s already challenging to manage a manufacturing business. Running it with fewer employees isn’t desirable, but may become necessary.