Will health care reform hurt or benefit self storage companies? According to the national Self Storage Association, 90 percent of all self storage companies are single facilities run by owner/operators. In other words, most self storage facilities are small businesses. A careful look at how the health care reform bill affects small businesses, then, will tell us exactly how it might affect most self storage companies.
Currently, nearly half of small business owners do not have health insurance themselves or provide it to their employees. Among firms that have between three and nine employees, less than half provide health insurance. The initial impact of health care reform, therefore, will depend on whether or not a self storage firm has 50 or more employees. Larger firms, with 50 or more employees, will have to provide health insurance to employees or pay a fee. Smaller firms, though, including most self storage facilities, will not be forced to provide health insurance. But providing health insurance will become more feasible, if facilities choose to offer it.
Self storage companies that do offer health insurance will have to make sure that the insurance plans they choose will cover preventive care, and will provide insurance to children of employees until the children reach the age of 26. Self storage facilities, like other small businesses, will have seve
ral options for providing health care:
· Facilities can buy health care from a private company, and be provided with a tax credit amounting to 35 percent of the total premiums paid by the company for health insurance (assuming that the facility employs 10 or fewer staff members and that each one makes an average of $25,000 per year).
· Owner/operators who make less than 400 percent of the poverty level can apply for federal subsidies to defray the cost of their health insurance. Owner/operators who have low enough income levels may also qualify for Medicaid.
· Starting in 2014, self storage facilities and other small businesses will have the option of joining SHOPs, Small Business Health Options Programs, which allow several businesses to band together in order to buy insurance at better rates.
Reaction to the health care reform bill in the self storage community has been mixed. On the day President Barack Obama signed the new bill into law, a lively debate ensued at www.selfstoragetalk.com, with some owner/operators expressing deep skepticism and others hope. Among small business owners in general, reactions have also been mixed. Several organizations representing small businesses have noted their dissatisfaction with the new bill.
“This isn’t a health care bill – this is a tax bill wrapped up in health care paper,” the National Federation of Independent Business’ senior vice president, Susan Eckerly, told the Pittsburgh Business Times on Friday.
Commenting in the Hartford Business Journal yesterday, small business owner Kevin Galvin of Connecticut Commercial Maintenance Inc. disagreed. “Small business owners will have more choices and greater accessibility to affordable health insurance, which will help them to attract and keep a talented workforce,” he said.
Meanwhile, Henry Sanders Jr. argued in Wisconsin’s The Cap Times on Saturday that the new bill will encourage entrepreneurs to start new businesses – including, potentially, self storage facilities – because losing health insurance will no longer stop would-be entrepreneurs from carrying out their business ideas.