Since the economy began recovering from the economic crisis of 2008 and 2009, Washington has used one key talking point.
According to politicians, the key to a sustained economic recovery in America is the strength and health of the small business community.
Small businesses create more jobs than large corporations and according to some economists, have led the way in recoveries during past recessions.
But much of the small business community feels like Washington’s commitment to their growth may have been nothing more than talk in light of the recent Supreme Court decision that upheld the Patient Protection and Affordable Care Act, better known as Obamacare.
Some of the key provisions of this law include:
- Most Americans must have at least minimal health care coverage or pay a penalty that the Supreme Court said, could be characterized as a tax.
- Insurers have to provide coverage to Americans with pre-existing conditions.
- Businesses with more than 50 full time employees have to provide health care coverage for their workforce.
According to some small business leaders, this law adds to what they’ve experienced since the economic recovery began: uncertainty.
The big question on the mind of the the small business owner is – How will Obamacare affect small business?
Small business, operating on slimmer margins that make them unable to absorb added regulatory costs, find it difficult to forecast revenue when laws are enacted that could affect their bottom line. Some business owners believe that adding healthy Americans to the health care pool will help to bring down the cost of coverage but others believe that costs will rise when those with pre-existing conditions are added.
Others believe that the law will add other costs that will eventually be passed down to taxpayers. Regardless of the eventual outcome, when business owners can’t accurately forecast future costs, they don’t hire or expand.
Others argue that the mandate requiring coverage for all employees once a business reaches 50 employees may not work as intended.
In order to prevent falling under that provision, some business owners will keep their employee base below 50 people and even worse, some may lay off full time employees in favor of independent contractors. This, according to business owners, may encourage less growth and even result in contraction.
Not everybody agrees.
The Small Business Majority, a non profit organization helping to solve problems facing the small business community, believes that the law is a positive for small business owners. They say that the law will make healthcare accessible and affordable for entrepreneurs around the country.
The Fight Not Over
The Supreme Court may have upheld most of the law but Republicans have vowed to overturn the law and much of the small business community is signing on to the effort. This will largely depend on the results of the upcoming presidential election taking place in November.
Until then, small business owners have to prepare for the future effects of the new law that is sure to be a talking point not only during this election year, but for the near future as more becomes clear about the costs and effects of Obamacare.
Right now healthcare is too expensive. The thought of having to get healthcare on my own is pretty scary. People all over feel tied to their jobs for fear of being without healthcare. Many get jobs they don’t want just because it has coverage.
That’s not good for people and not good for the economy. We need to be free to start up small businesses, follow our passions, and innovate like a small business can.
I’m all for finding ways to make healthcare less expensive. There’s a part of me that hopes healthcare will be easier to get and less expensive as well. As a small business owner with a family healthcare is critical.
But I fear that there will be a lot of unintended consequences with this Act in place.
I think we’re slowly heading into the age of the independent contractor. As more people can work from virtually anywhere I think you will see more companies hiring independent contractors. This will be even more likely if they have to watch the number of employees they have else they have to purchase health coverage for them.
That’s not good for the economy either.
I know this, it will be an interesting next few years as the details are hammered out on how Obamacare will be enacted and as the Act continues to grow into full effectiveness (some parts have already taken affect).
Do you run a small business? What do you think of Obamacare?
Obamacare Upheld, Small Business Community Divided | Fox Small Business Center
Supreme Court’s Obamacare Ruling Has Small Businesses Divided : The World :: American Express OPEN Forum
Small Business on Obamacare: No Reason to Hire or Invest – US Business News – CNBC