Local business owners impacted by health care reform

One week after the health care bill was signed into law, local small businesses are still trying to figure out how they will be affected by the legislation, parts of which go into effect as early as this summer.

The new law aims to provide health insurance to employees of small businesses by giving businesses who employ 25 or less employees a tax credit if they offer a health insurance plan.

From 2011 to 2013, small business employers would be able to receive a tax credit equal to 35 percent – 50 percent after 2013 – of what they paid for their employees’ health insurance.

A health insurance plan is already offered to employees at C.V. Lloyde Music Center, 102 S. Neil St. in Champaign, said Rob Martz, sales manager for the music center.

Martz said he does not think the plan will do enough to change how local small businesses already operate.

“A 35 percent tax credit is not enough to influence them to get them to offer a plan,” he said.

Martz added that the businesses will still have to pay the remaining 65 percent they were not paying before they offered their employees health insurance.

“If they don’t do it now, they’re not going to,” he said. “If we didn’t have it, I would say it wouldn’t be an incentive for us to incur the cost.”

Many business owners in Champaign said they were too small to take the provision into serious consideration. One of these small businesses is Austin Sportswear, located at 12 E. Main St.

Autumn Bates, owner of Austin Sportswear since 1986, said she only employs one person to work at the store other than herself, and the law should not affect her business.

Bates said she is insured under her husband’s plan and does not offer her one employee health insurance because that employee works only part-time.

While the tax credit will not take effect until 2011, another part of the law could affect a local tanning business later this year.

Kristin Klinker, owner of Electric Beach Tanning Studio, 313 E. Green St. in Champaign, said she does not know about the new tax credits, but said she may be affected by the provision in the law which implements a 10 percent tax on tanning services beginning July 1. The indoor tanning tax replaced a similar tax that would have been imposed on consumers of Botox and other cosmetic surgery products.

She said she is not sure how the tax will affect the members of the campus community that go to her business, but said it was unfortunate that a small group of consumers have to feel the burden.

“In the down economy, some people go tanning just to relax,” she said.

Although she said many people will keep going tanning, continuing the influx of money to businesses, the industry as a whole was not suited for opposition to the policy.

“The tanning industry does not have much representation when it some to this kind of thing,” she said. “We’re an easy target.”