Small business has been told they’re going to be financing a portion of the most recent stimulus package. Any business that offers health care and is subject to federal COBRA or simular requirments under state law is required to pay 65 percent of the premium on behalf of the COBRA participants. To recover the subsidy employers have to wait until they file Employer’s Quarterly Federal Tax Return (i.e. Form 941). This means that the float has to be financed by small business working capital which is already streached thin. Additionally, the additional administrative expense in complying with this program is lost productivity when we can’t afford it. While it generally doesn’t apply to businesses smaller than 20 employees this is going to impact a large number of companies. I don’t have a problem with the assistance provided to these unemployeed workers but the way that it is being implemented puts the burden on the employeer. It’s just another example of how governement shifts the burden over to business.
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Good for people to know.