Small Businesses Beware


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I take pride in being informed on major issues that are happening on a domestic and global scale. That is why I am quite embarrassed to say that I was very uneducated about the various nuances of the Patient Protection and Affordable Care Act. My quiz results of six out of ten were not terrible, but in all honesty I kind of guessed on a majority of the answers for I had no idea one way or the other. Many of the answers on the quiz thoroughly surprised me, for they went against some of my perceived notions of the health care bill. Most notably, the fact that the health reform requires that employers with 50 or more employees must pay a fine if they do not offer health insurance. Is this arbitrary number fair? Or does is tie the hands of employers in various instances that include hiring, firing, and the decision to keep people full-time or part-time?

Forbes published an article with a hypothetical situation where a small business struggles with the decision of hiring a 50th and 51st worker that would really help their production, but at the cost of offering every employee health insurance. Do the benefits outweigh the costs? It is a tough question to answer, for every little decision that small businesses make can have drastic consequences on their future success. This also affects big businesses that hope to have a larger full-time workforce. Each new full-time worker is to be provided health insurance in accordance with the new bill. Forbes points out that this could push businesses to hire more part-time workers in order to avoid the insurance payments. The forced benefits for workers are going to have a major effect on job availability when the bill comes into full effect in both smaller and larger businesses.

I personally feel that the specific number of 50 is going to cause more problems than good. Of course for businesses that already house between 100 and 200 employees, this will not be an issue. However, the companies with 45 to 60 employees may start making cuts or demotions to part-time in order to save profits that keep the business afloat. This is a very conservative viewpoint, but the working world can be fickle when it comes to crunch time and jobs can be lost due to owners and managers hoping to save a few extra dollars. This of course is just one of many provisions that Obamacare hopes to accomplish in the upcoming years. Other details such as financial help being given to workers with low to medium income who do not receive insurance through their professions are very noble and have my personal support. It is just difficult to put that pressure on a business owner with such a small workforce and tight budget. However, the fact that a bill has minor details that one may disagree with does not mean the overall act is not worth going forward with. This healthcare reformation will do more good than harm for many people and minor details should not derail the bill.

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5 comments on “Small Businesses Beware

  1. As you mention here, the 50 employee criterion is going to be a major sticking point for many small businesses. Of all the parts of ObamaCare, this aspect is one that I have heard a lot of discussion about already. Ultimately, businesses are going to be hesitate to hire above this threshold because the costs are just too great. Furthermore, there are many out there that believe that many businesses of up 10 100 employees will choose to restructure their staffing through lay-offs or increasing part-time work. It will be important to see how serious these businesses are because it could place pressure on our already suffering economy. A stable jobs market is the quickest route for the US to gain back its economic strength so the implications of this could be huge.

    • “A stable jobs market is the quickest route for the US to gain back its economic strength so the implications of this could be huge.”

      This a key point, and considering the individual implications of the act, becomes a double edged sword. A significant number of employers are faced with the tough decision of restructuring their employees, as you said, as well as the cost implications of providing health care, and to what extent. On the flip side, employees themselves have to worry about their jobs, hours, and potential income changes, as well as whether or not they will be receiving health benefits from their employer, and how that will affect their insurance options. I feel there needs to be more clarity in this area, and scaling costs for employers based on the size of their workforce, instead of a flat regulation for employers with 50 employees. The current provisions undermines the stability that is so desperately needed, and leave room for a lot of questions about the intent of this section of the act.

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  4. I don’t think it is politically conservative to ask the questions you are about the economics of marginal employees in that range.

    The conservative viewpoint would focus more on how market forces could lead to solutions… not the root issue.

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