Dealerships and other small auto businesses should decide how to comply with Obamacare, even though the key provision now won't be enforced until 2015.
The temptation is to delay taking action. But that would be a mistake, consultants and insurers say. Even the National Automobile Dealers Association, which opposed the health care legislation, now urges dealers to plan immediately.
The key issue is the employer mandate requiring any business with the equivalent of 50 or more full-time employees to provide medical insurance or pay annual penalties of up to $3,000 a head. Dealership groups already have more than 50 employees. But smaller dealerships with slightly fewer -- or more -- than that number face three stark options: provide insurance, pay annual fines or keep headcount below the trigger.
It's a critical business decision -- and a complex one. Fines might cost less than the insurance premiums. But premiums are tax deductible, and the fines aren't.
Beyond cost, owners also must calculate how much offering medical coverage would reduce staff turnover and replacement training costs -- and how not insuring would affect employee retention, morale and productivity.
Some dealers still hope Congress will repeal Obamacare. NADA warns bluntly that that won't happen.
So dithering is useless. Not developing a strategy now reduces options and increases the risk of a hasty, ill-conceived decision later. However unpalatable the task is, dealers must face up to it.