What Could A Repeal Of The ACA Mean For Your Small Business?

 
There is little doubt that Obamacare, more commonly known as the Affordable Care Act (ACA), is going to be weakened significantly if not completely done away with by the new administration. This could be a disaster for millions of Americans, and not just the 20 million who found healthcare under the ACA. Many small businesses could also be adversely impacted, in more ways than one. The severity of this impact will remain a matter of speculation until action is taken by the new president and Congress.

 

 
ACA tax breaks and credits help most small businesses

Tax credits and tax breaks of Obamacare help businesses with 25 or fewer full-time employees provide health care to their workers, which include over 90 percent of American companies. If those are reduced or done away with, those companies will either have to make up the difference or cut benefits to their employees. Under the ACA, the smaller the business the larger the tax break, which gives smaller businesses the most to lose if Obamacare is cut. The ACA also helps small business owners offer health insurance to their employees, and obtain better plans at a more affordable rate. Employees need health care, and if an employer does not offer it, they are more than likely to look for companies which do.

Under the ACA, businesses with 50 to 100 employees are able to apply for the Small Business Health Options Program (SHOP), which offers group plans and tax credits. Although the ACA increased obligations for businesses of that size, it also helped businesses at that level to meet their obligations and compete with larger corporations in the recruitment of workers by making healthcare a little less expense. The SHOP plan gave small businesses greater buying power. The ACA helped level the playing field, allowing small businesses to compete with larger ones for talented workers. If the tax credits and tax breaks of Obamacare are removed, small businesses will have to dig deeper into their own pockets or else yield the contest to those companies that can offer healthcare.

 
Larger businesses may benefit from a rollback of the ACA

While small companies benefited from the ACA, larger companies did see an increase in costs. Businesses and their employees making over $200,000 a year are required to contribute more to Medicare Part A tax. Any business with 50 or more full-time employees also has to offer health insurance under the Employer Mandate, or pay a penalty under the Employer Shared Responsibility Provision. This caused a number of large businesses to cut individual workers’ hours, reducing them to part-time employees to avoid added expenses. However, companies that did so had to hire and train more part-time workers to make up the difference, or demand more work in less time, which propelled many employees to look elsewhere. Companies that hired menial or unskilled labor were not impacted as much as those whom needed to retain a better educated and more experienced staff. Many small businesses, which make up most of the businesses in America, are exempt from the Employer Mandate.

Most large businesses, which represent less than 10 percent of the businesses in the United States, see any reduction in the ACA as a boon. According to government figures however, over 96 percent of those companies already offer healthcare to their full-time employees, and would only see a small drop in their Medicare taxes if Obamacare is repealed.

 
What could happen to businesses if the ACA is repealed?

The repeal or gutting of the ACA means that 20 million Americans who found help getting healthcare will have to pay higher premiums out of their own pocket or go without insurance. Those that have to pay more will have less to spend, hurting all businesses, which depend on their customers. Employees who will no longer be able to afford healthcare will have to face the possibility of bankruptcy or other serious financial difficulty should a member of their family require healthcare.

Large corporations and businesses with 100 or more employees will see some tax relief if the ACA is repealed. All other businesses will lose tax breaks, tax credits and access to group plans gained under the ACA. As healthcare costs rise for workers, especially the 20 million who now have care under the ACA, almost all businesses will suffer as Americans will have less money to spend.

 

 
This article was written by Mark McLaughlin for CBS Small Business Pulse.
 

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