Small Businesses Figure Out How to Cope With Obamacare

Thursday, 24 Apr 2014 02:31 PM

By Melissa Clyne

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Many small-business owners are studying their strategies for coping with Obamacare, The Wall Street Journal reported.

Small businesses have until 2015 or beyond to begin providing health insurance coverage to employees under Obamacare. One course of action is paying the $2,000 federal penalty for each full-time worker after the first 30, while others include cutting employees’ hours and reducing the number of employees to fewer than 50 full-time workers, the threshold for having to provide coverage, according to the Journal.

"You've really got to run the numbers and find out what's going to work best for your bottom line," Melinda Emerson, chief executive of Quintessence Group, a small-business consulting firm, told the Journal. "You don't want to wait and then have to make a drastic cost increase to your customers or make a significant reduction to your labor force" when the law's provisions take effect. You want to do that gradually."

Businesses with fewer than 50 full-time employees account for 96 percent of all U.S. employers, according to the U.S. Small Business Administration.

In 2010, President Obama predicted that his signature legislation would save employers so much money that they could give their employees a raise, according to a March USA Today op-ed by Tim Phillips, president of Americans for Prosperity.

Not true, according to Phillips, who cited a February report from the Centers for Medicare and Medicaid Services that estimated that two-thirds of the country's small businesses will see their healthcare costs increase due to Obamacare.

"This will translate into higher health insurance premiums for 11 million employees," he wrote.

Earlier this year, Republican House Speaker John Boehner characterized the federal estimates for rising health insurance premiums as "another punch in the gut for Americans already struggling in the president’s economy," according to The Daily Caller.

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