March 29, 2020

You’re the Boss Blog: For Business Owners, the Health Care Details Begin to Emerge

Staying Alive

The struggles of a business trying to survive.

Last week, before the election, I received a fat envelope from Independence Blue Cross with our health insurance renewal rates for 2013. This happens about this time each fall, and it is not something I look forward to.

I’ve had a couple of good years — my rates fell in 2010 and 2011 — but this was preceded by a long string of years with double-digit increases. Which is discouraging, because the astronomic rise in costs wasn’t accompanied by any apparent rise in the quality of the health care we have been getting. Co-pays have gone up. Drugs have gotten more expensive. At the doctor’s office they still hand me that stupid clipboard with the paper questionnaire to fill out, then they make me wait another 30 minutes to see the doctor. Most problematic, in my opinion: I still can’t find a price list for any of the doctor’s routine services. So I have no way to compare the costs.

I open the envelope, wade through the pages of boilerplate and finally get to the heart of the matter. For the third year in a row, my rates have dropped. It’s not a huge amount, about 5 percent, but it’s better than another increase. The monthly charge for a single person has dropped from $330.89 to $315.23, and the rate for family coverage fell from $971.26 a month to $925.31. To put this in perspective, here are the rates for my cheapest policy options for the last seven years:


The drop from the peak in 2010 is significant, but I’m still paying 50 percent more for insurance that I was in 2005.

The envelope from Blue Cross was followed by an e-mail from our benefits administrator, with a spreadsheet attached that recapped all of the pricing information and added a whole lot more. Most of it was procedural, laying out the steps required for me to renew the policies for all my workers. But one of the tabs in the sheet was titled “Health Care Reform” and laid out all of the ways that the Affordable Care Act — a k a Obamacare — would be changing the landscape. It’s a long list, sorted by date, and progressing from now until the date of full implementation in 2014. This item in particular caught my eye:

“Effective March 2013: Employers must provide a new notice to all employees explaining the availability of Exchanges and whether or not the employee may be eligible for insurance affordability programs through the Exchange. The notice must be provided to new employees upon date of hire. Guidance is pending.”

Scrolling further down the page, there was more:

“Effective January 1 2014: All U.S. citizens and legal residents must maintain ‘minimum essential coverage.’ Failure to obtain minimum essential coverage will result in financial penalties for groups with more than 50 employees. Some exceptions apply.”

And effective the same date, this:

“Health insurance will be available for purchase through the exchanges. Private and nonprofit insurers as well as states will offer small employers (up to 100 employees) the ability to purchase health insurance. Large employers (more than 100 employees) may purchase coverage through the exchanges beginning in 2017. Employers will not be required to purchase coverage through an exchange.”

Ah, the crux of the matter. Within a year I’ll have some idea of what it will save me (and cost my employees) to stop providing health insurance. I’ll have the option to let my workers get their own coverage, just the same way they get car and house insurance. I have not made up my mind whether this is a good idea or not, but soon I’ll have some real numbers to think about.

With President Obama’s re-election, the Affordable Care Act will be fully implemented. I voted for him, twice, partially in hope that something would be done about the health care mess. So this is what I get.

How about you? What has happened to your rates? What are you finding in your renewal packages? What do the health care changes mean for your company?

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

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Bucks Blog: A Simple Place to Start: Your Net Worth

Carl Richards

Carl Richards is a certified financial planner in Park City, Utah, and is the director of investor education at BAM Advisor Services. His book, “The Behavior Gap,” was published this year. His sketches are archived on the Bucks blog.

The world is a crazy place. We hear reports that say the economy is getting better. Next month, we hear that things don’t look so good. It feels like a tug-of-war, and we’re caught in the middle. Looking around, you may feel like the only thing you have any hope of controlling is your financial situation. So you want to make some changes and put a framework around your financial future.

But there’s so much information! Credit card statements, mortgage payments, insurance renewals, student loan bills and every other piece of financial data about your life can be overwhelming. It’s incredibly easy to throw up your hands and say, “I don’t know where to start.”

The best place to start is with your current reality. Seems obvious, right? But if it’s so obvious, then why haven’t we done it?

  1. It can be painful. The reason you’re looking to change things is because something isn’t working. That something may be incredibly personal, like how you talk about money with your spouse. So we avoid our current reality and tell ourselves things will get better tomorrow.
  2. There are a million other things to do. We’re all busy. Thinking about what’s right and wrong with your current reality probably doesn’t make anyone’s Top Ten list.

But if you find yourself in a situation where you’re ready to make a change, the best place to start is at the beginning by creating a personal balance sheet. Your goal is to discover where you stand financially right now.

You don’t need a fancy spreadsheet or even a computer for this exercise. Just grab a blank piece of paper and a pen. Then draw a line down the middle.

On the left side, list all your assets in detail. Bank accounts, equity in your home (that is not meant to be a joke), investment portfolio. For every asset, list it and its value.

On the right side, list all your liabilities. Credit card debt, mortgage, school loans. Again, get specific and list the actual amounts of each liability.

If you don’t know, call your bank, credit card company or your adviser. In this exercise, guessing isn’t allowed, so ask the questions and get the real numbers on paper.

Then, add up all your assets and subtract all your liabilities. You now have your net worth.

What does it look like? If you’re not happy with the number you see, you have two choices that will probably involve some hard work:

  1. Increase your assets
  2. Decrease your liabilities

If you’re wondering why I suggest starting with something so simple, it’s because I keep crossing paths with people who don’t know how their assets compare to their liabilities. And the reality is that if you don’t know where you stand today, then how will you ever figure out where you want to be tomorrow?

So the next time you think you don’t know where to start, ask the question, “What does my current reality look like?” Once you know where you stand, then you can make an honest assessment of your options and what comes next.


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You’re the Boss Blog: What’s Going On With My Bank?

Staying Alive

The struggles of a business trying to survive.

Wednesday was kind of a busy day, but late in the afternoon I tried to log in to my bank’s Web site to see what checks had posted (I bank with PNC). I couldn’t get in. Web sites don’t load now and then, and I didn’t give it much thought.

Yesterday morning I was discussing the payments we expected to receive this week with my two salesmen, Don and Nate. They are responsible for sending out invoices and keeping track of whether we have been paid with a cash management spreadsheet. Nate had received verbal confirmation of a sale of a conference table on Tuesday and added it to our production queue. We normally require a deposit in hand to do this, but you know how it goes — putting up a sales number is fun, and we were convinced the deal was a go. Why not do the client a favor and schedule manufacturing?

I asked Nate whether we had received a deposit from a new customer I’ll call Company T. This client had said it was  sending its deposit through an electronic funds transfer. Nate hadn’t heard whether the deposit, a little more than $9,000, had been sent and suggested I check the bank Web site to see whether the payment had posted. I tried again to log in, and again couldn’t connect. Hmmm. I tried refreshing several times, quitting and restarting the browser, and finally tried using two other browsers. Eventually PNC displayed a page that said the site was experiencing some technical issues and that I should try later. Again, other duties pressed and I set it aside.

At the end of Thursday, Don took a credit card from a client he had been working with — let’s call it Company S. We added the client to our list, but now I had a problem: Who gets the first available production time, Company T or Company S? They both wanted their tables as soon as possible, so the first one to commit money would get it. The call from Company S happened late on Thursday, just as I was walking out the door. I figured I would sort it out on Friday morning.

So when I came in on Friday, I tried again to log in, and this time nothing at all came up. This was starting to seem strange. As it happened, I needed some cash, so I hopped in my car to go to the local branch and see what was going on. When I got there, I was told that hackers had taken down the PNC Web site and that a number of major banks had been affected. The teller had no idea when it would be back up. At least I was able to see, on the bank’s own computers, that Company T’s transfer had gone through on Thursday.

Back at the office, I tried again to log in. No luck. I’ve continued to try throughout the day, and even as I wrote this post (early afternoon) I couldn’t get in. Now I’m a little worried. My bookkeeper won’t be able to reconcile our payments for the week, and I won’t be able to confirm that my cash management plans are still current. And beyond that: what’s up with PNC?

There hasn’t been much news about this incident (The Times’s Bits blog ran a post), but I was able to find out that a number of major banks had been affected. I have accounts with Chase and Wells Fargo, and I was able to get access to both of them, although it took a while to log in. PNC seems to have been hit harder or not been as nimble in response.

It’s disconcerting, to say the least, to find out how vulnerable my bank is to an outside attack. It’s been a disruption to my business that I didn’t expect, and the longer it goes on, the more worrisome it becomes.

I have planned my business around ready access to up-to-date financial information and rely on it to make sure I’m solvent. This particular week I have some cushion in my accounts, but I’ve lived through many periods where knowing whether $9,000 had arrived or not would make all the difference in the world — if I were trying to make payroll, for instance, or trying to make sure that critical materials shipped, or trying to avoid penalty payments on a credit card.

Is anyone else having trouble seeing their accounts right now?

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

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