LOS ANGELES — Maurice Stein sells face paint that can make you look like a bronze statue or an alien. Or a vampire. For those in need of facial hair, he's got a big glass case full of glue-on sideburns, moustaches and mutton chops.
But there's little this expert makeup man can do to mask the worry he feels about his business.
The economic downturn has ravaged Cinema Secrets, the cosmetics retail and manufacturing firm that Stein runs with his wife and three adult children in Burbank, Calif. He's lost half of his clientele, pink-slipped two-thirds of his employees and mortgaged his paid-off house to pay the bills.
Through it all, Stein, 76, has continued to pay for his employees' health insurance. He spends $11,000 a month to cover just half of the cost of premiums on the Anthem Blue Cross PPO and HMO policies that he provides the 40 people who still work for him.
He's hoping for some relief from the recently enacted health overhaul. But he's not likely to get much.
Stein's company is small but still too big to qualify for the tax credits that are meant to help small businesses provide health insurance to their employees. Under the Patient Protection and Affordable Care Act signed into law in March, companies with 10 employees or fewer will get rebates from the federal government for up to 50 percent of what they spend on their employees' care.
Without the boost from the tax credit, Stein will face a difficult choice. Should he cancel the insurance if his fortunes don't improve?
There's nothing in the new law that requires him to continue providing it. That requirement kicks in for companies with 50 or more full-time employees, or enough part-timers to add up to the equivalent of 50 full-time jobs.
But making sure his workers get medical care is important to Stein. He has diabetes. His wife is a breast cancer survivor, as is his daughter. And he believes that providing coverage makes his company more stable by helping him attract and retain good people.
"I have provided it from the day I started this company," Stein said. After 25 years as a Hollywood makeup man, Stein started Cinema Secrets in 1984, the year he turned 50.
The company started out selling mostly cosmetics, but it quickly added a Halloween line that included costumes, makeup and fake scars. The company had 120 employees at its peak a few years ago, but the combined effect of outsourcing, a Hollywood writers strike and the poor economy has winnowed its ranks.
Lucien Wulsin, director of the Insure the Uninsured Project and a faculty associate at the UCLA Center for Health Policy Research, said Stein's premiums might get a little cheaper in 2014, when purchasing groups will be set up to help small businesses buy insurance. When the groups _ known as insurance exchanges _ are in place, small businesses will be able to join together to purchase plans for their employees.
That's a significant step, because large groups are much cheaper to insure than small groups.
The reason is that a big pool of employees and their families spreads the cost of medical care for the few group members likely to become severely ill. That makes it less risky for insurance companies _ and less expensive for consumers.
The policies would also be cheaper than they are now because, under the new law, insurers will no longer be able to charge extra for people with pre-existing conditions. The amount they can charge for older people will also be limited.
Still, Stein might not be able to afford the premiums for his employees (he and his wife are on Medicare). If he cancels his plan, the law would require his employees to buy insurance for themselves.
But that doesn't mean he can't help them. New laws meant to control the cost of premiums could eventually bring down the cost of the employees' new plans, Wulsin said, while also allowing Stein to contribute as much as he can toward helping them.
"Once it hits 2014 ... premiums should be lower for both the employer and the employee," Wulsin said.
Q&A: How health reform will affect small businesses
Q: If I work for a small business, will my employer have to provide health benefits?
A: No. Starting in 2014, businesses with more than 50 full-time employees will be subject to a complex set of new rules that would penalize some businesses that do not provide health benefits. But employers with fewer than 50 full-time workers are exempted from these new regulations.
Q: What if the small business I own or work for wants to provide health benefits?
A: This year, a new tax credit will be available to help qualifying businesses offer their employees health insurance.
Q: How does a small business qualify for the credit?
A: The credit is available to businesses that meet certain criteria. The business must have fewer than 25 full-time employees and an average wage of less than $50,000 a year. And it must pay at least half of its employees' premiums. The size of the credit depends on how many employees work at the business and how much they are paid. The most aid goes to the smallest businesses with the lowest-paid workers. For example, companies with fewer than 10 employees and an average wage of $25,000 a year would qualify for a credit worth 35 percent of the employer's contributions to employees' health plans. The credit is gradually phased out for larger small employers with higher paid workforces. The credit is less generous for small nonprofits.
Q: What if I work for a small business that doesn't offer benefits?
A: There isn't much that you can do right now except try to buy an insurance policy on your own. That is slated to change in 2014 when states set up new regulated insurance exchanges where insurers will compete to offer plans with benefits that will have to meet minimum standards. If you work for a small business that does not offer benefits, you will be able to shop for insurance on these exchanges. The health care law also will allow small businesses with as many as 100 employees to enter an exchange, where employees could shop for coverage. Businesses that pay for a portion of their workers' benefits will be eligible for a tax credit worth as much as 50 percent of their contribution.
Q: Will there be any new taxes on small businesses to pay for all this?
A: Most taxpayers now pay 1.45 percent of their earnings to support Medicare, the federal health insurance program for the elderly. Starting in 2013, all individuals who earn more than $200,000 and couples earning more than $250,000 a year will see that percentage rise to 2.35 percent. Many small business owners report their business income on their personal income tax returns. That could push some into the higher bracket, requiring them to pay the higher Medicare tax. This is not expected to affect most small business owners, according to the nonpartisan Joint Committee on Taxation, which estimates that 6 percent of them report incomes in the higher range. Owners of tanning salons will contend with one additional tax. Starting this year, customers will pay a 10 percent tax on all indoor tanning services.