Why Obamacare Will Affect Every Small Business

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I’ve heard many small business owners all but threaten to pack up and leave the country now that President Obama is set to serve a second term at the White House.  The uncertainty about how the healthcare bill will affect small business is enough to get many small business owners worried, and we’ve certainly thought about it here at Direct Capital.

How you’re affected depends greatly on your current number of employees.  There may even be ways you can benefit from the changes, so you may want to hold off on purchasing that plane ticket and keep reading.

If you’re a small business with between 30 and 50 employees, then you’ll be required to offer coverage to your employees or risk being hit with some hefty fines.  With the cost of health insurance being close to $4,000 per year per employee, it’s likely that many small businesses in this category will opt to instead pay the $2000 fine rather than offer health insurance.  But still, the tax credits that come with the health insurance plans will undoubtedly help to cover some of these costs.

If you have less than 29 employees, then you’ll be exempt from all fees – both a blessing and curse for small businesses in this category.  Some predict that this could discourage expansion and growth because small business owners will not be eager to hire new employees and then hit the 30-50 employee mark where those fees will kick in.

If you’re a small business with more than 50 employees, then you must sponsor health care for your employees or you’ll be faced with hefty fines from the government.  You’ll still benefit from some of those tax credits though, which can be up to 50% of the plan costs.

The best part?  If you’ve been doing without health insurance for yourself, as we know many small business owners have been for years, then this may finally be your chance to get some decent coverage.  Obamacare could even mean an increase in the number of new small business owners, as any potential entrepreneur that has been hanging on to a lack luster job just strictly for the health benefits could now have the means to venture out on their own into the world of startups.

Only time will tell how small businesses will react to this reform, but as always we will be keeping our eyes and ears open to what small business owners like yourself have to say. We hope that this will help your business, not hurt it.

How is your business planning on handling these new regulations?  Let us know in the comments!

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