Health Care: How does Supreme Court’s decision affect small businesses?
FROM Amy Materson |
June 29, 2012
In a move praised by President Barack Obama and denounced by Republicans, the U.S. Supreme Court upheld the Patient Protection and Affordable Care Act of 2010, including the individual mandate requiring uninsured adults to either purchase health care or pay a penalty, as well as the employer mandate that will require employers with more than 50 workers to offer health care coverage.
So, what does this mean for small contractors? It depends on whom you ask. At face value, most small business advocates consider the decision a financial blow for small companies. If a company has more than 50 employees but can’t afford to offer coverage, they face fines of up to $3,000 per year for each employee. The International Franchise Association issued a statement saying the law discourages creating new jobs and expanding small businesses.
The National Federation of Independent Business joined in, telling the Boston Herald the law is “a tax on all Americans.”
Kurt Summers, president of Austin Generator Service in Austin, Texas, says in an op-ed piece he will have to rethink hiring, acquisition and expansion plans for his business, which is a generator sales, rental and service firm.
At face value, most small business advocates consider the decision a financial blow for small companies.
According to an article in Entrepreneur, though, a D.C.-based nonpartisan think tank believes requiring all to have health insurance will cause the pool of healthy people to expand, reducing premiums for many. The law also ensures affordable coverage for those with pre-existing conditions who could not have obtained affordable health insurance within the existing system.
For now, small businesses have adopted a wait-and-see approach. GOP lawmakers have vowed to repeal the law if they achieve control following November’s election, making both budgeting for health care and determining hiring decisions difficult. A strategist at the Potomac Research Group in Washington predicts businesses will be reluctant to spend and hire through the election, and if Republican candidate Mitt Romney wins, businesses will wait until the Affordable Care Act is inevitably overturned. The Associated Builders and Contractors issued a statement following the decision urging Congress to repeal the law.