Will ObamaCare Strengthen Small Businesses?

Many small businesses have been paying nearly twice the amount for half the health care benefits for their employees. However, under the new health care mandate, smaller-scale enterprises, which account for nearly two-thirds of the country's national output, will receive ample leeway to invest in avenues that will make their businesses stronger in the long run.  

The Affordable Healthcare Act, or the ACA (HR 3692), derided as ObamaCare by Republicans, is a bill that was presented by the U.S. House of Representatives nearly three years ago, to reform the current U.S. health care system, which lobbyists have been saying, discriminates against people who are uninsured, under-insured, unemployed, poor or afflicted with pre-existing medical conditions. Presently, insurance carriers have been denying health coverage to people even for reasons as flimsy as a prior experience with a CT scan.

In the lead-up to the Supreme Court's decision on the health care law last month, many larger American business firms were opposed to the mandate, claiming that being coerced to offer government-approved health insurance to employees or pay new federal taxes for not doing so, would destroy jobs by making it much costlier to hire workers in the future. Also, several healthy and able-bodied Americans were balking at the prospect of being compelled to have health insurance -- an unjustified nuisance that they felt would impinge on their freedom of choice.  

Last month, however, Chief Justice John G. Roberts Jr., in a 5-4 decision, approved a majority of the ACA, including its core individual mandate, which requires people who can afford health insurance to either have it or pay what Massachusetts officials have been calling a penalty.

Small businesses that believe the new law will help them retain a strong and healthy employee base are now celebrating the decision rather than lamenting its outcomes on their enterprise. Companies that offer good health insurance to their employees will also find it easier to recruit the best talent, compared to businesses that do not offer such benefits. Furthermore, the ACA will trim down premium costs for employers who are already providing health care benefits to their workers.

An increasing number of entrepreneurs are saying that chronic stress and absenteeism arising from health problems that workers develop will substantially decline -- a trend that will boost productivity across American companies -- as millions of small and medium-sized enterprises become better positioned to extend health insurance to employees.    

Furthermore, small businesses with fewer than 50 employees will be eligible for tax credits by 2014 to offset any costs of providing insurance to their employees.

A study conducted by a small-business advocacy group, Small Business Majority last month, reveals that 50 percent of the 800 small-business owners surveyed across the U.S. strongly agreed with the health care reform law either as it was or with minor changes, at most. Only one-third wanted it repealed. Once small-business owners developed a better understanding of how the law would work, the support for keeping it intact grew to 56 percent, while the proportion that countered it fell to 28 percent.  

Jody Hall, a former Starbucks employee who left the coffee chain operator in 2003 to open a cupcake bakery business in Seattle, traveled cross-country to Washington, D.C. last month to pledge her support for the health care law to Congress and explain how it was helping small businesses.

The state Affordable Insurance Exchanges that will open in 2014 to provide coverage to high-risk individuals and help people and small business employers compare and purchase health plans will give entrepreneurial outfits the kind of bargaining power that big companies like Starbucks and Microsoft enjoy, Hall told the House Education and Workforce Committee at a hearing on lowering health-care costs for workers and employers.

Meanwhile, GOP presidential candidate Mitt Romney is under fire from both Democrats and Republicans for his campaign's wavering response to the ACA mandate. Conservatives were irate after Romney's policy advisor Eric Fehrnstrom told MSNBC last week that the Republican candidate agreed with Mr. Obama's view that a fine on those who defied the mandate was really a penalty rather than a tax. However, Romney called President Obama's fine a tax just a few days later, incurring the wrath of the Democrats.