One of the Affordable Care Acts’ opponents ‘most repeated claims is its “job killing” nature. According to the law’s critics, it has caused widespread uncertainty for the business community throughout the US keeping them from effectively budgeting for premium costs which results in companies putting off hiring. Other claims call the law’s coverage requirements prohibitive which will cause small businesses to choose between retaining costly employee health insurance plans & eliminating coverage and just pay the cheaper penalty. Opponent are positive the burdens of the health care reform will eventually drive people out of business and kill the entrepreneurial spirit in the US.
But is any of this true?
The landmark health care case decided last week by the Supreme Court was a win for the Obama administration and a loss for the Republican Party. But the official plaintiff in the case wasn’t a Republican congressional leader or even one of the conservative attorneys general whose activism fueled the litigation. It was the National Federation of Independent Businesses, a small-business membership organization and lobbying group that strongly opposed the law.
Firms with fewer than 50 employees are also exempt from the “employer responsibility” [mandate] provision of the law that otherwise constitutes the biggest business burden in the legislation.The Affordable Care Act (in)famously requires that all individuals who don’t receive insurance from their employer or from a government program such as Medicare or Medicaid must buy their own insurance on a regulated exchange. Subsidies will be provided to those for whom such insurance wouldn’t be affordable. That could be seen as, in effect, penalizing firms that already offer insurance to their workers. To offset this, the law stipulates that companies whose employees receive subsidies to buy exchange plans must pay a financial penalty. That is supposed to deter firms from responding to the law by simply dropping existing insurance coverage. But the ACA doesn’t make small businesses pay that penalty.
Put the special subsidies and the exemption together, and the result is a law that’s pretty clearly a good deal for small businesses.