A micro-business’ concerns about Green Mountain Care

by Estella Leach 

Doug Leach Excavation

The prospect of Green Mountain Care is ominous to me both as a small business owner and a consumer of health care services.

Our company is 1 of 277 site prep contractors in the State of Vermont according to data provided to the State by Infogroup . We have been in business for over 25 years.

Two hundred fifteen establishments of our type employ from 1 to 4 persons, so I believe our company size is representative of the majority. When our industry is in a downturn, one company may not lay off a hundred people, but 100 companies may lay off one or two. Some just go out of business.

So, when Montpelier throws up something as huge as GMC, stating they will support it via tax revenue, it gets my attention. So far, I have a lot of questions and no answers. This uncertainty naturally leads to anxious speculation, and an inability to plan for the future.

The Shumlin administration needs to show small businesses before November 2012 exactly what they have in mind. That is the only way I can determine how to proceed on a business strategy for our company and a health care strategy for myself, my family, and my employees.

Passing a bill (Act 48) to establish GMC with no concrete plan in place for revenue and expense data leaves our planning ability up in the air. One has to question the motives of the administration, because if the GMC funding mechanisms were going to be good news for businesses like mine, I expect the plan would be spread all over every news outlet in this State.

Our company is not unusual. Like many, we have seen our health care costs escalate over the past several years, and we have made adjustments by choosing health savings accounts and higher deductible plans. This has allowed us to keep our annual health care premiums at about the same annual dollars while choosing to spend more out of pocket to maintain personal health care autonomy. We also have a keen incentive to compare costs of our purchases and procedures.

To adjust for premium increases, tax increases, increased regulation and cost of compliance, we spend less elsewhere, and as owners, we take on a lot more of the work ourselves. There is no such thing as a summer vacation. I don’t see how GMC makes this better. I can see how it will make things worse.

The only formal recommendation for funding GMC has been a payroll tax. I made a calculation based on a payroll tax using spring NFIB reports. I can’t see how we will save any money.

If the payroll tax is 10.9 for employers and 3.5% on employees, owner/operators may be taxed more for a State policy of undetermined benefit (if the tax rate stands at a minimum of 14.4%) than we pay for a two-person policy today.

Based on our current premium of $7200 annually, any income the two of us earn above $50,000, our State Premium (tax) would continue to rise above our current premium, and again, I have no idea what a State policy would cover. It is quite possible we will have to buy supplemental insurance at an additional cost if we want to maintain the level of coverage we have now.

Now, for $7200 we are getting no ‘Cadillac’ policy, but it meets our needs. But, I am concerned that our very small business will not be treated equitably when it comes to providing ‘Cadillac’ policies and naming exemptions. For instance, our mini worker’s comp policy has a fixed expense constant of $250, and we pay the same fee as Ben and Jerry’s/Unilever.

If we made the 2009 average per capita income for Vermonters of $41,061 x 2 or $82,122 for two, with a 14.4% tax, our two-person tax may be $11,825.68.

Plus, additional tax burden would adversely affect the 2009 data from the Tax Foundation which lists Vermont State with the 8th highest percent of tax per capita income in 2009.

We really want to see policies that are good for business and jobs. We’d like to see our friends and neighbors prosperous, employed and healthy. But we need to see a plan for GMC containing data confirming the financial feasibility this concept. We need to see this sooner rather than later. Now, we’re in purgatory and have no idea which way it – or our small family business — will go.