Republicans: Stop crying. Democrats: Stop gloating. Scientologists: Leave Katie alone. And CPAs: Let's get to work.
The Affordable Care Act is real. It's law. And it's moving forward. That's a fact. And, while so many businesses are figuring out how this change in health insurance law will affect them, many others are doing what Americans do best: figuring out how to profit. Because that's what smart entrepreneurs, and their financial advisors, do. Other than on Election Day, they put aside their emotions, tuck their political leanings aside, and work within the current environment to maximize their profits. Politics are important, of course. But a business owner has payroll to meet, a family to feed, and partners, customers and suppliers who rely on their business.
So you may or may not support our president. You may or may not agree with health care reform. Let your opinions be known in November. In the meantime, consider these few ideas and help your clients to profit from it. Because I promise you, your competitors are doing just that.
• Reduce your tax expense. If you're employing less than 25 full-time people whose average salary is less than $50,000 per year, then you're entitled to a tax credit for a portion of what you're paying every year in health insurance. The maximum credit (50 percent) is available for those employing less than 10 full-time people making an average of $25,000 per year. Don't get excited -- the chances of you getting the full credit are about the same as me ever seeing the new Katy Perry movie. But there's still a few bucks up for grabs, so grab them.
• Do business with the state exchanges. By Jan. 1, 2014, all of my children are required to have moved out of my house and all states are required to have exchanges set up so that individuals and companies who choose to do so can purchase their health insurance. Many states have delayed action pending the outcome of the Supreme Court decision. Now it's on.
• Get rid of your insurance. When the fabled state exchanges are up and running, you'll be encouraged to let your employees get their insurance there. What is this dark magic and how will it work? You'll be required to maintain a "qualified" plan and if you don't you'll be penalized - sorry, taxed (according to the Supreme Court). So why fight City Hall? Having your employees purchase their health insurance from the state exchanges, even with some reimbursement from you, may still be cheaper in the long run. For sure it'll be easier to budget your health insurance costs and it will certainly eliminate the internal cost (not to mention the complaints) of your office manager administrating all the forms and communications required by the current plan you have.
• Take advantage of pre-existing conditions. No one can deny that Batman is a nutcase. But what business wouldn't want to hire him for overnight security, am I right? Hiring a guy with deep psychological issues like Batman in the past wasn't easy. But now anyone with a pre-existing condition will soon be able to move from job to job and their insurance companies are not allowed to drop or deny coverage. So if you're looking for that key person with that special skill (or a really cool Batarang) who you couldn't hire before because they would lose coverage ... now you can. And if you're an employee looking to switch jobs or start your own business and couldn't before ... now you can.
• Think about biotech. In recent years it's been the Web, mobile and Betty White who have received all the attention. But with 34 million more people entering the market, many experts predict the emergence of new stars: companies developing new medical and biotechnology products. A science writer reported back on the bill's original passage, "There are two small bits in the Patient Protection and Affordable Care Act that are immediately relevant and timely for the biotechnology industry. One provides tax breaks for smaller biotechnology companies, while the other simplifies some aspects of the regulatory landscape and adds some complicated wrinkles." And if biotech companies boom, they'll be looking for help with those tax breaks.
• Consider a little consulting or speaking. There's going to be plenty of need for all of that over the next few years. Just about every client I know is confused by how this law will affect their business. They need help. If you're an expert (or can sing and dance a little) there are plenty of opportunities to help small, midsized and large companies navigate their way around the law. And plenty of other opportunities to speak to groups about the plan's effects. Do we stick with our existing plan? Do we drop coverage and send our people to the state exchanges? What are the state exchanges? When will Betty White host SNL again? See what I mean?
• Provide indirect services to the health care industry. Hospitals and other health care providers have been applauding the Supreme Court ruling. Why? Because, like it or not, the act adds millions of new customers to the markets and provides a way for insurance companies to pay for their services. That can only mean more business for the health care industry. To me, that means growth. Maybe you're not in the health care business -- but that doesn't mean that the health care business can't do business with your business. Smart business owners I know hitch themselves to growing industries and promote their services to them. This way they grow together.
• Keep an eye on new markets. The act will certainly be opening up new markets where you can sell your products and services. For example, one acupuncturist is on pins and needles (get it?) because, "By 2014, Section 3502 of President Obama's health care reform could mandate the Bureau of Health Statistics to formally recognize acupuncture as a profession, opening the door to Medicare coverage for acupuncture, serving our growing elderly population, as well as providing it as an option for millions of low- and middle-income Americans in need of care."
• Help wanted: payments and process consulting. Are you an expert in business process consulting? Consider these opportunities: Section 3021 of the legislation establishes the Center for Medicare and Medicaid Innovation, whose purpose will be to innovate payment and delivery of services to patients. Section 6301 provides funding for a new patient-centered Outcomes Research Institute, whose purpose is to help government, employers, consumers and private insurers determine which treatment/procedures offer good value for their cost. Now there are a couple of organizations that could use your consulting help if you've got the expertise.
• Become an auditor. It's great that health care coverage will be provided for all, including the 34 million or so who don't currently have it. And it's great that the government will penalize -- sorry, tax -- those who don't get health insurance. But who's going to enforce that? If it's a tax, then it must be the Internal Revenue Service. And if people couldn't afford health insurance before, there's a good chance that many won't be able to afford it no matter what the penalty -- sorry, tax -- is. Next up: Here come the auditors! Plenty of experts feel that there will be a significant need for auditors to help enforce this law. Maybe your firm can help provide these services?
The country will survive health care reform. Who knows? We may even be better off from it. Two things about the legislation are for sure: Some smart entrepreneurs, particularly the ones with good financial advisors, will profit from the changes in the law. And Betty White will probably use it to figure out a way to live another hundred years.
Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service, and financial management tools to small and midsized businesses.
