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More Small Business Expenses Created by the Healthcare Overhaul
Posted by Randy | May 21, 2010

Small businesses are on the hook for $17 billion dollars of paperwork expenses as a result of the healthcare overhaul. Requirements state that they must fill out an IRS form for every expenditure over $600 dollars. Here’s a look at exactly how that requirement will impact our small businesses:

 

  • Form 1099 today applies only to independent contractors, e.g. a graphic artist who earns $1,000 for designing a sales brochure. Come 2012, healthcare overhaul will vastly expand 1099s to sellers of goods as well as services, and not just the self-employed, but also businesses – large and small.

 

  • Imagine that a small company sacrifices the equivalent of just two hours each month to perform these calculations and file 1099s at tax season. Every year, this would cost – get this – $1,776.

 

  • Many struggling businesses would waste even more money on this fresh headache. Every dollar spent to spew out 1099s is one less dollar that could pay new employees, train existing staffers, or develop new products, services, and markets.

 

  • Over ten years, this measure would extract $17 billion from the jugulars of America’s already anemic small businesses.

 

  • Atop this, the Galen Institute’s Grace-Marie Turner reports that the healthcare overhaul will require employers to evaluate their health plans’ affordability by calculating each employee’s household income, not just that worker’s individual wages. This likely will involve, at a minimum, collecting income declarations from every staff member.

 

Facts courtesy of the Republican Study Committee.
Comments
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  • Charles Teets commented on 5/24/2010
    We can just lay off our entire workforce so we only have 2 employees, then we are exempt from all of this correct?
  • Diane Holland commented on 5/24/2010
    Mr Forbes, I am reading all the comments about the healthcare bill and what will happen in 2012 unless we make changes. My question it this, Why did my health care cost go up 331/3 percent this year. I am retired, have kept my insurance with Portsmouth Public Schools and was just informed that I will now be paying $715.00 per month. My cost of healthcare has sky rocketed since I retired 6 years ago before any healthcare bill was passed. I am trying to understand why anyone thinks leaving them alone to do the right thing is the answer. They are much to greedy to do the right thing and we cannot stand by and let them continue to have control.
  • Milton Hargrave commented on 5/25/2010
    Not mentioned is the cost on the government side of the business that accomplishes absolutely nothing but an increase in overhead that burdens all we tax payers.
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