Obamacare could bankrupt businesses - The Packer

Obamacare could bankrupt businesses

05/23/2014 09:58:00 AM
Doug Ohlemeier

Doug Ohlemeier, Eastern EditorDoug Ohlemeier, Eastern EditorThough the full effect of Obamacare or the Affordable Care Act isn’t being felt yet, those who work in the growing and distribution parts of the produce industry are preparing for an expected burden.

In Florida, the Florida Fruit & Vegetable Association is working to prepare grower-shippers for the changes.

Bruce Fishbein, a partner with Miami wholesaler The Produce Connection Inc., understands the need for affordable health care because one of his brothers has cancer and can’t afford the $500 in monthly medcical expenses his insurance doesn’t cover.

Fishbein calculated the costs to employers and said he sees the problems most businesses will face from Obamacare.

Though many declined coverage, Fishbein provides his workers insurance.

If he gave all of his 80 employees insurance through Obamacare, the premiums he would be required to pay would increase from the $220,000 he now pays to $490,000.

Paying the $80,000 to $90,000 fine is much less expensive, and, from a purely financial standpoint, makes more sense, something he says others also figure.

“Every businessman I know plans to do the same thing,” he said.

“There’s no problem with the idea of Obamacare. It’s the implementation. With what they expect from people like us, those that run businesses, it’s screwing everyone. This will backfire on them so badly it isn’t even funny. Instead of creating jobs and making it safer for those who don’t have health care, companies will go out of business.”

Michael Carlton, FFVA’s director of labor relations, agrees that the situation will become dicey for grower-shippers once the mandate is effective. It’s been delayed, but is scheduled to take effect in 2016 for businesses with 50-99 workers and in 2015 for companies with 100 or more workers.

“There is concern over how they will be able to manage this in a business already operating on tight and fluctuating margins,” he said.

“Those margins could take them to close to zero and there’s little doubt that this is likely to take them below profitability in some years. If it gets to the point to where they’re losing money every year, they won’t be able to stay in business.”

After the mandate becomes reality, harvesting contractors will likely pass the increased healthcare costs on to growers, further aggravating things as grower-shippers can’t pass their costs on to their customers, Carlton said.

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Raleigh NC  |  May, 27, 2014 at 11:01 AM

Doug, Thanks for writing this piece, and for talking with the produce people likely to be affected by the growing disaster of Obamacare. Why more industries are not sounding the alarm bells about the imminent employer mandates is a mystery to me - I guess some people don't want to rock the boat. I have also noticed critics of this administration's policies can come in for some pretty severe criticism. Nonetheless, articles like yours should have produce people hastening to talk with their HR people and insurance companies about the coming upheaval. Thanks

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