Obamacare and the Impact on Small Business


English: Barack Obama signing the Patient Prot...

English: Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

Business’s of all size’s are now basking in the glory of Black Friday and yet another successful start of the Christmas shopping season.  In the background however is the new year and the pending regulatory nightmare formally known as The Patient Protection and Affordable Care Act (PPACA).  After all is said and done, it is now simply known as and referred to as Obamacare.

Looking at small business’s and their contribution to both local and the overall U.S. economy, the onset of Obamacare is causing them to pause as they look towards the future of their business.

In our nations capital more than 150 of D.C.’s small businesses have expressed their opposition to the D.C. Health Exchange Authority’s unanimously approved plan.  The District of Columbia (D.C.) has begun to create their own Health Care Insurance Exchange.  D.C., moved forward on the creation of the exchange, in spite of their consultants admonition against the exchange.  For those small businesses within the beltway, if you’re happy with your current insurer and insurance, you’re out of luck.   Your business must switch to the untested, and currently unknown, government run system.  For those who are self employed and currently uninsured, Obamacare requires you to purchase health insurance.

The Obama administration is moving forward with implementation of their health care initiative despite the backlash from small business owners and the public at large.  Karen Mills, head of the government’s Small Business Administration, is claiming ignorance of any issues  with Obamacare and small business’s.

“You know, I travel all around the country, every week I go to a different part of the country. I’m with small businesses. And I’m not hearing that.”

It’s clearly evident that Mills doesn’t read any news reports or articles on the internet, otherwise she’d be well aware of the overwhelming apprehension towards Obamacare.

The 2012 National Survey of Employer-Sponsored Health Plans, estimates that the average individual employee cost of health coverage will rise 6.5 percent in 2013.   More than half of the employers surveyed plan to shift the cost increase to their employees.  Small business’s and their employees will see changes in their 2012 W2’s they receive in January of 2013.

Individual W-2s issued in January 2013 for wages paid in 2012 will for the first time include a line showing the benefit employees receive from their employer provided health care. This is an attempt to make health care benefits and spending more transparent. Small businesses may see an increase in their costs of W-2 preparation to cover gathering of the newly required information and the reporting thereof.

If you’re a small business that employs 50 people or more, you have a decision to make beginning in 2014.  Your business can sponsor a health plan for 100% of your workers  or pay $750 per worker in penalties to the federal government.  A business might opt to pay the penalty and do away with health insurance seeing as paying the annual penalty might be less expensive. This option would leave the employees uninsured, and for them to go to state health plan exchanges to buy health coverage might be more expensive.
Some small business analysts think that increased insurance costs will discourage business hiring in the next decade.  The reasoning?  The new reforms don’t put any caps on health insurance premiums. Therefore insurance companies have every reason to hike rates before the new health insurance exchanges appear in 2014 “to increase competition.”


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