With the Supreme Court upholding the Affordable Care Act, some small businesses face rising costs when the full law goes into effect in 2014.
This morning, the Supreme Court upheld the most controversial portion of the law, the individual mandate, which requires individuals to either buy health insurance or pay a fine. The majority opinion from Chief Justice John Roberts described the fine as a tax, which is permitted under the powers of Congress. Businesses with 50 employees or more will also have to insure their employees or pay a fine.
"I don’t know any quicker way to kill an economy that is trying to get out of the doldrums than to add taxes to small business,” said Rick Murray, CEO of the Arizona Small Business Association.
Murray said many of the businesses represented by ASBA are concerned about rising costs.
"They’re upset about it,” he said. "A lot of them do not offer health insurance because of financial reasons.”
Businesses with up to 25 employees are eligible for a tax credit of up to 35 percent if they cover half of their employees premiums. That tax credit could be as high as 50 percent when the full law goes into effect.
Businesses with fewer than 50 employees will not face a fine if they do not offer insurance. Those with fewer than 100 employees will have the option to shop for insurance plans in proposed exchanges, a kind of marketplace for different insurance plans.
With so many different aspects of the law having different effects on different areas of the market, it’s hard to predict exactly how the small business community will react.
Economist Marjorie Baldwin at Arizona State University’s W. P. Carey School of Business said costs are not likely to decrease. Baldwin participated in conference calls with the White House Health Reform Task Force in 2009 before the initial bill was drafted.
If insurance companies had not been gouging customers for years, then there would not of been any reason to try to regulate them. For businesses with 25 or less employees I think this will actually decrease health costs provided those companies are already offerering health insurance to its employees.
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