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Small business owners listening to an expert discuss the effects federal health care reform will have on small businesses had plenty to digest Thursday.

Bob Graboyes, the senior fellow for health and economics at the National Federation of Independent Business Research Foundation, painted a grim picture during his three-hour seminar in Missoula.

Graboyes warned of soaring costs, piles of paperwork and the huge uncertainty that business owners face before full implementation of the Patient Protection and Affordable Care Act comes in 2014.

“It’s frightening, I think it has potential to destroy business,” said Sheri Smith, human resource manager at Triple Creek Ranch in Darby, during the lunch break.

Smith and Triple Creek general manager Leslie McConnell came to Graboyes’ presentation at the Hilton Garden Inn to help prepare themselves for the work they must do to make sure the ranch complies with all the ACA’s provisions.

Triple Creek employs anywhere from 50 to 70 employees, depending on the time of year. They don’t yet know what provisions will affect them and how much different scenarios will cost the company, Smith said.

“We’re stunned at the complexity,” McConnell said.

Challenges to business owners include the fact that the act includes 1,000 pages of law and 13,000 pages of regulations – so far. Many regulations haven’t been finalized and every business is unique when it comes to compliance, according to NFIB information Graboyes presented.

Graboyes’ visit was presented by the Big Sky Chapter of the Young Presidents’ Organization, in collaboration with the Montana chapter of the NFIB, a nonprofit group that supports health care reform but is largely opposed to the ACA.

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Graboyes discussed provisions of the act already in effect, such as the small business health insurance tax credit, which according to NFIB statistics, will help relatively few businesses.

He also touched on the three major provisions of the bill: the individual mandate tax, the individual subsidies and the employer mandate that requires businesses with more than 50 full-time employees to provide insurance or face tax penalties.

That employer mandate has the potential to cost businesses hundreds of thousands of dollars and put some out of business, Graboyes said.

Beartooth Harley-Davidson owner Barry Usher helped sponsor Graboyes’ visit to Montana, which included stops in Billings and Bozeman.

Usher believes the employer mandate has already stifled business.

“I was looking into buying another dealership, but I have to see if it makes financial sense,” said Usher, a “49er” teetering on the edge of having 50 full-time employees.

Overall, the Affordable Care Act is making it impossible for employers to plan ahead, therefore hampering growth, Usher said.

“We can’t plan because we just don’t know,” Usher said.

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Graboyes shared a series of scenarios to highlight the complexity of the employer mandate stipulations.

For example, if spouses own two separate business, employees from both entities will be counted toward the 50. And employees from individually registered franchises owned by the same person will all be counted toward the 50.

Altering a business structure in any major way isn’t a viable work-around for the employer mandate because it could raise flags with the federal government, Graboyes said.

To help sort out the provision’s effects on businesses, owners must stay in constant contact with their attorneys, brokers and accountants, Graboyes said.

The consequences of the employer mandate are starting to spread beyond private business, as colleges and municipalities choose to cut hours for staff rather than pay for insurance coverage or the tax penalties, Graboyes said.

The NFIB is currently working to repeal the employer insurance mandate portion of the bill. Graboyes urged the roughly 25 seminar attendees to join the organization in that fight.

“We need to walk into Congress with numbers and tell them” to remove it, Graboyes said.

Until then, Usher wants business owners to be prepared with information so they can continue asking questions that help them sort through the act’s provisions.

“This is devastating,” Usher said of the act. “My outlook and my purpose (of bringing Graboyes to Montana) was to give them enough questions for them to go to their attorney, their broker, with questions to ask.”

Reporter Jenna Cederberg can be reached at 523-5241 or at jenna.cederberg@missoulian.com.

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