Small businesses see pros, cons of new health care law

Small businesses will either thrive or struggle to survive under the nation's new health care law.

Those two sides of the debate are offered by U.S. Rep. Melissa Bean, a Barrington Democrat who voted with her party in favor of the plan, and U.S. Rep. Mark Kirk, a Highland Park Republican, who voted against it, also along party lines.

Bean said small businesses would pay less in premiums, pool together to offer choices to employees and reduce their cost with about $40 billion in tax credits available to pay for the coverage.

Kirk told business people that the plan would raise insurance premiums, put jobs at risk and raise taxes on families and small businesses.

So who's right? Who's talking straight?

The answer isn't so clear, at this point. With few solid details early in the process, experts said it's tough to tell how the law will impact small businesses and their employees.

Then again, both sides could be right, said Jack Ablin, chief investment officer of Harris Bank in Chicago, who has studied the health care and business issues.

"There's a means and an end situation with health care reform," Ablin said. "The end is universal coverage and easy access to health care that could spark enormous job growth."

The single most reason entrepreneurs do not start a business is due to the lack of affordable health care. And studies have shown that companies with 20 or fewer employees have helped create 3.6 million new jobs nationwide and collectively in 1980, 1990 and 2000, he said.

While health care reform is noble, the issue of paying for it could be costly, Ablin said.

"The plan is good for business, but it's been hoisted on the backs of wealthier Americans to pay for it. Those with $250,000 in household income will be paying higher taxes to support this," Ablin said.

The answer will vary significantly from business to business, said Doug Whitley, president and CEO of the Illinois State Chamber of Commerce.

"We are now entering a likely shakeout period where the true results and consequences of the new federal law will emerge over time as individual business owners make their individuals decisions," Whitley said.

Around the suburbs, small business owners expressed strong views along the debate lines.

"That depends on whether you're staunchly Republican or staunchly Democrat," said Dale Perrin, executive director of the Lake Zurich Area Chamber of Commerce, which has about 500 members. About 65 percent of those members are small businesses in Lake Zurich, Hawthorn Woods, Long Grove, Kildeer, Deer Park and North Barrington. Many of those small businesses do not offer insurance to their workers, he said.

"Some small businesses believe they'll save more in the long run, there won't be any new taxes and they'll provide affordable insurance, while the other side said that they're going to tax businesses to death and ruin everyone."

Michele and Jeff Miller have owned Schaumburg-based Divine Signs for about seven years and provide insurance to their six full-time workers. They wondered about increasing government interference and higher fees or taxes.

"For those businesses with over 50 employees, much will change and for many the change will close their doors," Michele Miller predicted.

Lewis Field, president of Arlington Heights-based H. Field & Sons Inc., believed the new law is "a great thing." He and his brother, Chuck Field, are the third generation to run the company that supplies corrugated packaging.

Lewis Field believes the new law will make insurance premiums affordable and help firms offer less expensive options. The company offers insurance to its 10 employees. "I think this is a great thing," said Field. "Later, by 2014, we could provide a menu where employees could choose a different plan and can get that. It will be like offering a pool of insurance companies."

Others aren't keen about government involvement.

"Being a business owner for 30 years I have never seen any government programs or regulations that have made my company more efficient or profitable. Just look at the government's track record with welfare, public housing, Social Security and Medicare," said Tom Hebda, president of Tri-Cor International in Lombard.

The intentions of the reform are noble, but the means of achieving them will be a problem, said David Ven Horst, partner in Schaumburg-based Tenant Advisors Inc.

"I think many of my clients will defer new hiring even further due to what will surely be higher health insurance premiums for their employees, and higher taxes on their income."

The phasing in of the bill over the next seven years is confusing, said Lynda Reilly, president of Lynmar Lending Group Inc. in Naperville.

"Learning what is the responsibility of the employer and keeping records to prove the company is in compliance will demand more paperwork and time, which always means more cost for the business and will effect the bottom line."

It will take years to know the full extent of the impact from this bill, said Thomas Rowen, director of institutional portfolio management at Fifth Third Bank in Chicago.

"A number of provisions do not take effect until 2014 and 2018, and a number of amendments and additional legislation may be introduced now that the landmark bill has passed," Rowen said.