Earlier this week, the Supreme Court of the United States made a ruling that has since been the subject of wide discussion and intense scrutiny: it upheld the Affordable Care Act, the health care law championed by President Obama. Now, small business owners and entrepreneurs in Georgia and throughout the country are wondering whether the health care mandate will affect their business plans.
Health care reform can affect the business formation process, as business owners must consider workers’ compensation, health care, and other factors for themselves and employees when determining their business costs. The new law will require employers with 50 or more full-time employees to provide health care or be penalized.
One source says that, when the expenses for employees are totaled, the costs may be as much as 40 percent greater than the hourly wage. It has already been estimated that private insurance premiums may rise as much as 4.1 percent by 2014. For entrepreneurs, when the cost of hiring and maintaining employees rises, it may become more challenging for employers to keep up with financial demands.
It has been estimated that 22 percent of small business owners could potentially drop insurance coverage in response to the health care reform. Entrepreneurs in Georgia are concerned that their projected costs, two to three years in advance, may be challenged by the health care reform, potentially making employees more expensive to maintain and employ. Many businesses also do not take advantage of tax credits because they are said to be largely prohibitive and their application difficult to navigate.
Source: Forbes, “The Entrepreneur’s Dilemma,” Jim Garland, June 18, 2012