MFI Could Solve Healthcare Cost Problems for Growing Manufacturers

Some organizations that have studied the potential impact of the Affordable Care Act have concluded that it will negatively affect the American business community.

Other organizations have concluded the 2010 law that was intended to address the problem of roughly 50 million Americans not having health insurance will spur the creation of small businesses by employees who now fear they will lose their health insurance if they leave their jobs.

The effect of the law, which has become commonly known as Obamacare, or the new health care reform, is uncertain, but one thing is certain, many American business executives are very worried. In fact, most members of the Small Business and Entrepreneurship Council want the law repealed because they think it will increase health insurance costs, according to Forbes magazine.

“For small business owners–and most other Americans–Obamacare is the devil we don’t want to know,” wrote Jim Blasingame of Forbes.

The new health care reform gives American manufacturers an excellent opportunity to explore the Mexican option.

American manufacturers that utilize Mexican Manufacturing are saving money.

“Our clients typically experience cost savings equivalent to $1 million per year every 50 employees when they move their operation from the U.S. to Mexico,” said Fatih Akben, MFI’s Director of New Business Development.

The statistic about how much manufacturers with 50 employees save is important because the new health care reform mandates that businesses with at least 50 full-time employees must pay fines if they don’t provide health insurance for those employees. Many small business executives have said publicly that they have already reduced their full-time staff in an effort to avoid those fines although the Affordable Care Act won’t even go into effect for employers until 2015 (it goes into effect for individuals in 2014).

Reducing the number of employees can negatively affect production, but American companies can maintain their level of production by hiring companies like MFI International MFG., which has been a contract manufacturer for American companies in numerous industries, including the textiles industry, since 1982. “Nearshoring” with MFI has saved American manufacturers a lot of money and doesn’t slow down their production schedule because MFI’s manufacturing plants in Mexico are located in Ciudad Juarez, which is on the American border and is so close to major transportation routes that the expense of bringing the product to market is very reasonable.

The Affordable Care Act doesn’t have provisions that explicitly affect one industry more than another, although industries with a larger share of companies with more than 50 employees will be affected more by the law.

Objective analysis of the impact of the Affordable Care Act are hard to find, but Politico.com gives it a crack in an article entitled “How the new health care reform affects businesses — large and small.” The points the article makes include:

* Beginning in 2015, all employers with “the equivalent of 50 or more full-time workers” who don’t offer health insurance must pay a $2,000 per worker fine annually “not counting the first 30” (employers with 100 employees will pay a $140,000 annual fine — 70 workers times $2,000).

* Very few small businesses are using the tax credits that are supposed to help small business pay for health insurance because the credits are “underwhelming,” according to an official from the National Federation of Independent Business.

* Many employers have praised the Obama administration for postponing the requirements for businesses to report the details of their health insurance policies to the U.S. government.

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