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Guest Perspective: Prognosis for real estate companies grim in wake of health care act ruling

By Nancy Braun, broker and owner of Charlotte-based Showcase Realty

As a caring American, I believe it would be ideal if we all had health coverage. With the economic crisis facing our country, I question whether this is the time to impose a mandate on businesses to provide health insurance to their employees or face penalties.

The economic future of America is dependent on the success and growth of small businesses, the greatest job creators. As a small-business owner with growing payroll, overhead and compliance costs and smaller profit margins, it’s challenging to make the numbers work.

I own a small and growing real estate company. I started the company four years ago with just two employees, and now we are 15 and growing.

I am proud to be able to offer training and job skills, as well as an income, to 15 families and many more contractors we support. While I wish I could also offer health coverage to my employees, I realistically would not be able to keep the doors open.

I also have a number of agents who hold their license with our firm and are considered independent contractors and are compensated on a commission basis. So I am concerned that regulations, or its implementation, will include the independent contractor agents as being covered by this new law.

The reality is that real estate agents barely make any money the first couple of years in the business. If real estate companies are required to provide health insurance to agents, they would be less likely to hire new (in-training) nonproducing agents or agents who are not top producers.

Also, the commission split would clearly change, so in reality the agents will be paying the costs for insurance, not their employer.

I am overwhelmed by the amount of time and resources I have to devote to regulatory compliance in lieu of time devoted to trying to grow my business. To a small-business owner, governmental oversight can be crippling.

I don’t think the supporters of this act really understand the consequences that will ensue. To further impose more taxes/penalties on businesses already struggling is a death sentence to so many businesses that are trying to stay afloat.

As a matter of necessity to remain competitive and profitable, what I suspect will result is:

  • the most qualified employees will seek out jobs from larger companies that can afford to offer health care coverage, ultimately leaving the smaller businesses in a competitive disadvantage to hire talented and skilled employees;
  • businesses will restructure themselves or cease hiring to keep them under the 50-employee threshold;
  • companies will move their operations overseas and will outsource overseas in greater numbers;
  • companies that are struggling will be forced to shut down, resulting in an even higher unemployment rate; and
  • American businesses will further lose their competitive advantage internationally.

There are 20 new taxes being imposed with this “affordable” act. We need to be focusing on job creation and supporting businesses, rather than overtaxing and over-regulating them.

 

(Editor’s note: Braun, broker and owner of Charlotte-based Showcase Realty, wrote this column in response to the U.S. Supreme Court’s upholding last week of the Obama administration’s Affordable Care Act.)

2 comments

  1. It sounds to me like Ms. Braun will do just fine under the Affordable Care Act. She is doing all she can to attract good agents. This act does not alter her relationship with her independent contractors and she is already competing with large firms that can offer full health coverage. Furthermore, she will no longer find her coverage and the coverage of her employees subject to huge premium increases foisted upon her by insurance companies. Starting in 2014, most people who are uninsured or buying individual insurance with incomes up to four times the poverty level ($92,200 for a family of four and $44,680 for a single person in 2012) will be eligible for expanded coverage through Medicaid or tax credits to subsidize the cost of private insurance. Also, her employees and contractors will not be denied for pre-existing conditions and no longer have lifetime limits as imposed by insurance companies. On the contrary, I think this will be helpful to smaller businesses. They have lived with whiplash from insurance companies for too long. Their experience has been tough. There are still changes that can be made to improve upon this act, but it takes every one to make sure that they participate in making it even better.

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