Dropping Health Insurance

"Steve Hooper, of the Health Economics Group, a company that manages corporate benefit plans, says most of his employees have incomes low enough to receive federal subsidies," says Stacy Cowley in Dropping Health Plans, to Pick Better Coverage. Employers are not offering health insurance anymore, after they are realizing that their employees would be better off that way. "Mr. [Keith] Perkins, who is 54, did the math and calculated that most of his employees, who are spread across Maryland, West Virginia and Pennsylvania, would come out ahead if he dropped his group policy and let them buy insurance individually through the new federal and state exchanges," says Stacy Cowley. Mr. Perkins "was tired of trying to choose one plan every year to cover all of their diverse needs." He found a way for the employees to make their own choices. "When I did the subsidy calculator, I realized many of them would actually be better off if we didn't offer coverage. We took the amount of money we were paying for health insurance and dumped it into their paychecks instead. And this way, they get to make the choice, not me," says Mr. Perkins. This way, the employer doesn’t have to worry about fitting the needs of the employee when it comes to health insurance. “Employers are seriously considering walking away from their plans,” says Thomas Harte, an insurance broker with Landmark Benefits in Hampstead, N.H.

I think it is a good thing that Keith Perkins put the money he was paying for health insurance into his employee’s paychecks. It gives them the opportunity to choose how they deal with their health insurance on their own, and it means that the employer does not have to include the health insurance in his plan. To me, it seems like this is better for both sides. “The decline in the number of small businesses offering health insurance began long before the new law… It is too early to say how the Affordable Care Act will affect that trend, but health insurance has long been a headache for small businesses. Their policies are typically more expensive than comparable plans available to larger employers, and because the risk pool of participants is tiny, one sick employee can increase a group’s premiums sharply,” says Stacy Cowley. Small businesses’ policies are probably more expensive so that people will want to be employed there. They probably have to offer more so a person would choose them over a bigger business.

Source: "Dropping Health Plans, to Pick Better Coverage" by  Stacy Cowley, from http://www.nytimes.com, published December 11, 2013

iCracked

AJ Forsythe was searching for a summer job until he had a broken iPhone and decided to repair it on his own. He was a junior in college at California Polytechnic State University when he started his own company. "He went to his school library and got to work, starting his company in 2010," says Kate Rogers from Fox News.

Forsythe’s iCracked is successful, turning “under $1 million in funding into a projected $10 million in revenue this year.” The company “has more than 400 iTechs across the country,” which travel “straight to customers to fix their devices at their homes, work, coffee shops and more, at their own convenience in under 30 minutes.” One of the company’s customer-attracting factors is that they come to you instead of you having to go out of your way to find someone to fix your broken device. “We believe it’s 2013 and you shouldn't be traveling to a store making appointments and essentially wasting time,” says Forsythe. “Our whole goal is to make this an extremely seamless process for our customers.” This is extremely smart of Forsythe to do, because in today’s time, a lot of people don’t have time for things like this. Many would simply get a new phone. In some cases, it may cost more time and money to repair the phone than to get a new one. iCracked makes it very easy simple for the customers. “Users can visit iCracked.com, enter their information and have an appointment that same day.” iCracked charges under $100 for repairs, unless you have a newer model iPad or iPhone. Those are a little more expensive, at $150. The company focuses on Apple products only, and they aim to be “the best at repairing the products they know best.” Forsythe says “We have a couple thousand people a month apply to be iTechs, and you set your own schedule, services and our own customers… you make incredible money and we funnel customers to our iTechs.”

AJ Forsythe started a great business after just fixing a small problem that he had. Now he fixes other people’s small problems and makes a lot of money from it. This was a great idea and it is a great way to make money. He took something that is an issue for a lot of people and found a way to make a ton of money off of it. 

Source: "iCracked Aims to Become the ‘AAA of iOS Devices’" by  Kate Rogers, from foxnews.com, published November 01, 2013

Why stop printing?

In order to save money, the government is going to stop printing “the roadmap[s] of the ocean,” which are charts that “tell you what’s under the water.” Knowing what is in your pathway “is critical for navigation.” When the government stops printing nautical charts after mid-April, “sailors, boaters and fishermen will have to use private on-demand printing, PDFs or electronic maps to see the information.” The National Oceanic and Atmospheric Administration is still going to chart the water for hazards, such as rocks or shipwrecks.

Even though “most people instead use the [more up-to-date and accurate] on-demand maps printed by private shops,” many prefer to use the nautical charts, and they “say they will miss the charts, which [are also] used as decorations.” Newburyport, Mass., harbormaster Paul Hogg says, “[i]t’s the nautical history, you know, pirates and ships.” He has a chart hanging on his wall. “It seems more nautical. There’s just kind of, like, a feel to it.” It seems to me that the people that prefer the old charts like them because of the historical feel to it. At New York Nautical, store manager James “Smitty” Smith prefers the old nautical charts because they’re “more soothing on the eyes.” He also admits that he “sells far more of the current on-demand map on the lighter weight, whiter paper” and he “saw the end of the old-fashioned maps coming.” He closes by saying “[t]here must be some art value in them because a lot of people love them.”

I don’t see why the government is going to stop printing these nautical charts. They sell the maps “for about $20 apiece, the same amount it costs to print them.” If they weren’t losing money from this to begin with, then how would it be saving money to stop printing them? The National Oceanic and Atmospheric Administration pays “about $100 million a year to survey and chart the nation’s waters.” They are planning to “still spend the same money, but provide the information in the less traditional way.” In my opinion, the decision to stop printing the nautical charts is unnecessary. If it is the same money that the agency is spending and earning, then they should have both products be available to consumers. If all of the options were still available, then they would not lose any sales from the people that like the old-fashioned charts. 

Source: "Federal government to stop printing nautical charts" by Associated Press, from foxnews.com published October 22, 2013

The Effect of Obamacare on Job Numbers

Obamacare is a very controversial topic. It could either help or destroy the economy, depending on how you view it. There are so many different views from so many different people on the effect that Obamacare has on jobs and businesses. IHS, a global firm hired to provide analysis of labor trends, does not even mention the Affordable Care Act in their most recent report about factors affecting employment numbers in Texas, which was published last year. Michael Lindenberger says that "the company said that's because it's not clear how or even if the act will affect net employment across the country, or in Texas."

Lindenberger starts off by saying that "Texas' two senators and many other critics of the Affordable Care Act keep saying it will cost America jobs just when it needs them the most." He also says that "senator Ted Cruz said last weekend that the law 'hands down, is the biggest job killer in this country'," and that "that's not happening yet- and probably won't, say labor economists, nonpartisan experts and some Dallas-area business leaders." In my opinion, since I have read so many different views on the topic, it is safe to say that there is no solid answer to whether or not Obamacare is helping or hurting jobs and businesses. There are too many different opinions out there from different people, and even the statistics aren't clear as to whether or not Obamacare has had a positive or negative impact on jobs in the country. Lindenberger says that University of Texas economics professor Daniel Hamermesh says "Obamacare will create some incentives to reduce hours or trim workforces, since insurance costs could rise. But they say the law will also benefit many of those same companies, leading to new jobs and longer workweeks for some." Lindenberger then asks "How exactly will that balancing act pan out?"

Michael Lindenberger's article goes on to basically tell you about many different views of Obamacare from people. Many say it is helpful, many say it will do nothing, and many say it could go either way. "You can raise hours for some at the expense of others and not affect the average workweek. Depending on the balancing, employment either goes up or down. There is no one-way answer," says Mike Montgomery, the U.S. economist for international information and analytics firm IHS. "Mathematically, Obamacare's impacts on job numbers could go either way," he says.

Source: "Economists: Obamacare's impact on jobs likely to be minimal" by Michael A. Lindenberger, from dallasnews.com. 10/12/13

Paying for Sunlight

Every hour, the sun beams onto Earth more than enough energy to satisfy global energy needs for an entire year. Sunlight is already free, but power companies want you to pay if you are using it to make electricity. Utilities say that solar-friendly rate plans are too generous, allowing solar customers to avoid paying for the grid even though they use it. It is becoming more difficult for the utility industry to hold onto customers since U.S. homes and businesses are becoming more efficient and are generating their own electricity. With some of the new fees or rate changes being pushed by utilities, rooftop solar systems would not be economical.

Solar energy is the technology used to harness the sun's energy and make it usable. Today, the technology produces less than one tenth of one percent of global energy demand. Rooftop solar has become a mainstream way to save money on power bills, and utilities are now afraid they will lose so many customers that they won't be able to afford to build and maintain the grid. Solar energy use has surged at about twenty percent a year over the past fifteen years, thanks to rapidly falling prices and gains in efficiency. Solar systems have dropped in price rapidly and grown to be more popular during a time when U.S. electricity use is flat or even declining. More customers are buying drastically less power when they generate their own with solar panels, fuel cells or other distributed generation technologies. This reduces the need to build big power plants and transmission lines, which is how utilities expand their businesses, make a profit for shareholders and keep their borrowing costs low. Regulators allow utilities to make higher profit when they build large projects.

Some power companies are putting forward the idea of an extra fee for solar customers. Utilities have proposed charging special fees or rolling back power-swapping rate plans in Georgia, Arizona, California and Idaho. In California, legislators voted to allow the state's solar rate plan to continue, but it would change the way the state's structures rates in a way that may address utilities' concerns. Arizona Public Service Co. officials propose either charging new solar users a rate that reclaims more of the utility's costs or reducing the benefit of the energy-swapping program.

"If I turn off my lights, the power company shouldn't send me a bill," suggests James Marlow, CEO of Radiance Solar in Atlanta. Power companies have said that Marlow should at least pay for the option of turning the lights back on when the sun is not shining. Now, the question is how much.

Source: "Clouds appear for solar users as utilities seek to recoup grid costs" by The Associated Press, from Dallas Morning News. 10/6/13

Bankruptcy Benefits

Bankruptcy gives an individual or business a chance to start fresh by forgiving debts that just can't be paid while offering creditors a chance to get some amount of repayment based on what assets are available. In theory, the ability to file for bankruptcy can benefit an overall economy by giving persons and businesses another chance and providing creditors with an amount of debt repayment. Bankruptcy filings in the United States can fall under one of several chapters of the Bankruptcy Code, such as Chapter 7, which involves liquidation of assets; Chapter 11, company or individual "reorganizations"; and Chapter 13, debt repayment with lowered debt covenants or payment plans. Bankruptcy filing specifications vary widely between different countries, leading to higher and lower filing rates depending on how easily a person or company can complete the process.

When a company is planning on walking away from billions in debt, it has no right to expect things to go smoothly. The largest power company in Texas is still pursuing a “prepackaged” bankruptcy.  A “prepackaged” bankruptcy is a plan for financial reorganization that a company prepares in cooperation with its creditors that will take effect once the company enters bankruptcy. This plan must be voted on by shareholders before the company files its petition for bankruptcy, and can result in shorter turnaround times. The idea behind a prepackaged bankruptcy plan is to shorten and simplify the bankruptcy process in order to save the company money in legal and accounting fees, as well as the amount of time spent in bankruptcy protection. The sooner the company can emerge from bankruptcy, the sooner it can implement its reorganization and return to generating revenues from its core operations. That type of restructuring usually costs less and finishes faster than a traditional Chapter 11 case and it often conforms to management’s vision. 

In 2013, 29 percent of the bankruptcy fillings by the public companies have been “prepackaged,” according to BankruptcyData.com. This share is almost two times as high as last year’s. The former TXU Corporation is in line now to become the largest bankruptcy, measured by its $40 billion in debt. Energy Future Holdings has many classes of creditors, and some face the prospect of losing 95 percent of their investments. They almost have nothing to lose by rejecting a deal or pushing to break up the company. Private equity firms are trying to salvage their reputation and some of their stakes, and hedge fund managers are trying to capitalize on a financial debacle. For some high-profile local cases, a bitter fight in bankruptcy court produced better returns for creditors and sometimes better prospects for employees.

Source: "Expect an EFH power fight" by Mitchell Schnurman, from Dallas Morning News. 9/22/13

No Longer Seeking Work

The unemployment rate is dropping, but for what reason? It is not because individuals are getting jobs, it is because they have stopped looking for jobs! In a recent newspaper article, Wire Reports announced that many individuals are no longer seeking work. This creates an economic problem, causing the labor participation rate to fall to its lowest level since August 1978.

From 2008 to 2013, the labor force participation rate has dropped from 66% to 63.2%. The labor force participation rate is the percentage of working-age people in an economy who are employed, or unemployed but looking for a job. Typically, working-aged people are people between the ages of 16-64. People in those age groups who are not counted as participating in the labor force are typically students, homemakers, and people under the age of 64 who are retired. 

The unemployment rate doubled from 5% to 10% between 2008 and 2009, and now, in 2013, it has fallen back down to 7.3%. The unemployment rate has fallen because more than 300,000 people stopped looking for work. The unemployment rate is the number in the civilian labor force divided by the number unemployed. However, everyone without a job isn't necessarily unemployed, at least according to the Bureau of Labor Statistics. To be counted in the unemployment rate, you not only have to be without a job, you have to have actively looked for work in the past four weeks. If someone has given up looking for work, they are no longer counted in the unemployment rate. When the unemployment rate reaches 6-7%, as it did in 2008, the government gets concerned, and tries to create jobs through stimulating the economy. It may also extend unemployment benefits to prevent the recession from deepening. Studies show that extended unemployment benefits are the best way to boost the economy. 

How exactly does creating jobs help the economy? Isn't it sort of a backwards approach to create jobs? If all jobs are occupied, then we would have sufficient resources to sustain society/economy and we would have excess people who wouldn't need jobs. If more people are looking for work, less people will be buying, and the retail sector will decline. If less people are looking for work, then that means jobs are being left undone. More jobs means more people having money, meaning more people buying things which goes back to the community and keeps businesses going. People need jobs in order to get a steady income. The employee will use that income to pay for products and services in order to enjoy life. 

Source: "On close look, job numbers not rosy" by Wire Reports, from Dallas Morning News, 9/7/13