One way or another, health care law will impact small businesses


The Supreme Court's recent decision to uphold the Affordable Care Act captured the country's attention. Those paying attention were most likely included partnerships and other small companies around New Jersey.

Under the health care law, businesses with 50 or more employees must provide affordable health insurance, as defined by the law, or face a penalty. However, in many cases, paying the penalty would be cheaper than providing insurance.

As a result of the price disparity, some businesses have indicated that they will consider not providing health insurance. Leaders of some of these businesses highlight that they have a duty to stakeholders to think about the potential benefits of absorbing the cost of the penalty rather than providing their employees with health insurance.

Though the formula for assessing penalties is long and complicated, penalties begin at $2,000 per worker, but do not include up to 30 workers when calculating the total fine.

In contrast, some businesses have claimed they pay $8,000 per worker per year in insurance for single employees and $16,000 for workers with families. For a company of 50, providing insurance at those rates could amount to between $400,000 and $800,000 per year.

Despite those figures, some health law experts have suggested that business owners will actually be pleasantly surprised by the variety of insurance alternatives that the law will lead to.

For companies who would prefer to avoid the law, rather than trust health law experts in favor of the law, a few options do exist. For businesses with fewer than 50 employees, the simplest option is to keep their workforce under 50. Businesses with more than 50 employees will have to make decisions about how to handle the situation.

Source: The Associated Press, " Small biz: questions, waiting after health care ruling," Joyce M. Rosenberg, June 28, 2012