Jackson Jambalaya

The Wall Street Journal reported the new "aggregation rules" under Obamacare are not exactly welcomed by small business. Simply put, the government counts all businesses owned by an individual as one business when counting towards the 50-employee threshold. Ownership means partial or full, the size of the ownership apparently does not matter.  The Journal stated:

Donna Baker of Adrian, Mich., owns an accounting firm, payroll company and retail store. Her husband, Kim, is the sixth generation owner of a dairy farm.

While the four businesses are separate entities, they count as one employer under the health-care law due to a technicality — Mrs. Baker is a minority stakeholder in the 1,800-acre property that her husband’s farm sits on, plus she helps out with some of the farm’s bookkeeping.

As a result, the Bakers are subject to aggregation rules in the U.S. tax code, which means they would be required to offer health-insurance benefits to their combined full-time staff — if it reaches 50 employees — starting in 2015, or pay a penalty.

“I’m just an investor in the farm,” says Mrs. Baker, who testified on the issue during a Congressional hearing Wednesday before the House Small Business Committee. “I am not running the day-to-day operations.”

The Bakers collectively employ just shy of 50 full-time workers, the threshold in which employers must provide health-care benefits to comply with the law. If they expand their headcounts in the coming year to 50 or more people, they would be subject to the mandate.

But while Mrs. Baker, 51 years old, says her payroll business is young and growing, she is hesitant to hire more staff. She says she’s already struggling to afford health benefits for existing employees at two of her firms and that having to start covering her husband’s eight full-time farm workers and future full-time recruits to any of their businesses would be too costly.....

“The calculations are complex and many small businesses will be caught unaware,” said Todd McCracken, president and CEO of the National Small Business Association, via email. Other business groups, including the U.S. Chamber of Commerce, International Franchise Association and the National Federation of Independent Business, have also expressed concern over how the aggregation rules apply the health law.

A spokeswoman for the U.S. Treasury declined to comment. During the hearing, Congresswoman Nydia M. Velázquez (D., N.Y.) said the aggregation rules are meant to prevent businesses from “skirting the law.”

One set of small-business owners most likely to be affected are franchisees such as Stephen Bienko of Allamuchy, N.J.

The 36-year-old entrepreneur owns four junk-hauling and moving franchises along the East Coast, each with about 25 employees. But come 2015, the businesses will be considered one employer under the health law, making them all subject to the employer mandate.

Mr. Bienko, who currently offers health benefits to only staffers who work more than 40 hours a week, says he estimates it will cost him an extra $125,000 a year, if all those newly eligible for employer coverage by law elect to take it.

The employer mandate defines full-time employees as those who work more than 30 hours a week, so Mr. Bienko says he’s planning to cut his staff’s hours in the year ahead, as well as hire only part-timers going forward, to try and avoid going over the threshold. Still, he’s not sure the strategy will work because the law, when calculating the 50 employee threshold, counts two employees whose combined weekly hours exceed 30 as a full-time equivalent.

“We’re just so darn scared,” says the College Hunks Hauling Junk franchisee. “I don’t have a team of analysts who can assist in calculating my company’s health-care costs. I’m afraid of making a clerical error that could have catastrophic financial implications.”.... Rest of article