Q: I hear so many conflicting points of view in the media. Will the implementation of the Affordable Care Act (Obamacare) help or hurt small business?
A: It depends on who you ask. While researching this column, I found articles and news reports usually fell into either the “for” or “against” category, showing a predictable slant on the effects of the law. To muddy things further, like most laws– Obamacare seems complicated and arbitrary at times. Nevertheless, here’s the gist of my plain-English attempt at a summary:
Workforce size matters. How the law affects your small business will largely depend on the number of employees you have.
Who wins the most? *Those with fewer than 25 employees. They are NOT required to offer health insurance. But if they already do (or decide to start) they could get a sizable tax credit for premium costs (35% now, 50% in 2014).
Who breaks even? *Those with 25-50 employees. Like their smaller counterpart, they are NOT required to offer health insurance. But unlike them, if they DO offer it (or start to) they’ll receive NO tax credit. Could they eventually see some collateral benefit from healthcare costs going down? time will tell.
Who may lose in the short term? Business with 50 or more employees who don’t offer health insurance. The law now requires them to provide health insurance or pay a $2,000 penalty per employee –although the first 30 employees are (arbitrarily?) exempted. Critics argue that to avoid paying the penalty, businesses nearing the 50 employee threshold will avoid new hiring. Supporters argue most employers this size already offer insurance, and those who don’t will more easily and affordably be able to. Again, time will tell.
A recent poll found that a majority of small business are unclear or incorrect about how the law affects them, and I attribute that to the contention surrounding Obamacare the last couple of years. I encourage us in the business community to start implementing the law so we can figure out what works, and then seek to amend what does not.
Learn more at: healthreform.kff.org, Healthcare.gov. cutimes.com
* These combined make-up the bulk (96%) of small business.
