The New Health Care Reform Bill and Small Businesses

Does the health care reform bill help our hurt small businesses?

Since the passage of the new Health Care Reform Bill, aka known as the Patient Protection and Affordable Care Act, many small businesses have been wondering how this new health plan will affect them. Small business owners and employees of small businesses want to know how the new bill will help - or hurt.

According to Small business expert and Aol contributor Steve Strauss, he agrees that although the recently passed health care plan is not ideal, what currently exists in the U.S. is much worse. He cites statistics that particularly point to the new plan being smart for small businesses and entrepreneurs: 49% of businesses with 3-9 employees -- which describes a majority of small businesses -- offered any kind of health insurance to their employees in 2008, which is almost 10% less than 10 years ago; 29% of employees at businesses with less than 25 employees were uninsured in 2007. Strauss thus sees that recent developments in affordable health insurance are a huge factor for a previously under-represented segment of the population.

Small businesses with fewer than 50 employees will not be forced to get coverage, even though they may anyway, simply because it provides a more affordable option than is currently available and is wrapped up in many incentives. One of the incentives is being able to group together with other small businesses to purchase insurance.

Being a former small business owner, this is certainly good news as far as I am concerned. I remember at one point NOT being able to get insurance at all for our small mom and pop operation. It was quite frustrating. As we grew, it was even more frustrating not to be able to pool resources with other similar small companies and buy a group insurance plan. With the passage of the new health care reform bill that will now be possible for small business owners..

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More freedom for employees - competition is good!

Another great thing that the new health care reform bill will do is to give employees more freedom to move between jobs. Employees that have previously held onto a job only because of medical benefits will now be able to move more freely between jobs - and/or - strike out on their own as entrepreneurs, purchasing their own health insurance plans. Strauss agrees:

"As a side effect, Strauss also sees the new bill as a potential boost for small businesses trying to grow; employees will feel compelled to change jobs and link up with smaller firms because these firms would have health coverage, or the individuals would be able to get affordable coverage themselves through "exchanges." It could also encourage many entrepreneurs to go out on their own and capitalize on new, creative business ideas. Employees staying at dissatisfying jobs simply for the benefit of health insurance will dissipate."

I find this aspect of the bill particularly exciting because I recently left a job where many of the employees stayed there for the health benefits only, something I found to be extremely disturbing. I had never seen such a group of hard working people. Many of them stayed trapped in a dead end job only because of their medical benefits. Although some of them were extremely talented, they were afraid to step out into new ventures. Hopefully with passage of this bill, people like this will be emboldened to follow their dreams - striking out to find better jobs or even try being small business owners themselves. I love the freedom that this bill gives those people.

Benefits and requirements for small business owners

Here are some of the main points of the health care reform bill and how it will affect small businesses:

-- There will be penalties for medium-sized businesses (50 workers or more) who don't offer insurance coverage to their employees. The fine could be up to $750 per worker.

-- The plan gives small businesses a tax credit: beginning in 2010, small employers can elect a tax credit for 50% of their employee health care coverage expenses. Small employers are generally defined as businesses with no more than 25 employees.

--Health insurance exchanges will be opened: this requires states to establish an American Health Benefit Exchange for purchase of qualified health insurance plans. This creates a related entity to assist with small business health coverage.

So in summary there are always some pros and cons to everything. Not everyone will be happy for some reason but the bottom line is that this new health reform bill does give the average American MORE freedom to make different life choices.There will of course be those that rant and rave about something wrong with the bill - but I'm sure that many small business owners also feel some relief that affordable insurance will be within their grasp. My family was paying $1,000 a month for partial medical coverage (just for our family of 4) when we were small business owners - and that was quite a burden for us every month. With passage of the new health care reform bill small business owners will have more access and hopefully more help connecting to cost saving group plans.

This has been the second in a series about about the New Health Care Reform Bill. To read about how the health care reform bill affects those with pre-existing conditions the first part is here at : http://hubpages.com/hub/What the Health Care Bill Means For People With Pre-Existing Conditions

(Dorsi Diaz is a freelance writer/publisher on the Internet who writes about small business,marketing, advertising and issues of the day. If this article has been helpful a thumbs up would be appreciated and please join her reader/fan club)


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Comments 8 comments

Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

A very good question and a well written hub.


ocbill profile image

ocbill 6 years ago from hopefully somewhere peaceful and nice

"Small businesses with fewer than 50 employees will not be forced to get coverage, " So the revised bill does not make it mandatory to have health insurance. It is simply more affordable. That is good news. Opponents were always saying it will be a crime if you do not carry health insurance with the new law.


billyaustindillon profile image

billyaustindillon 6 years ago

This just gets messier and messier with the latest senate action.


ethel smith profile image

ethel smith 6 years ago from Kingston-Upon-Hull

I hope the US people, on the whole, achieve what they want as far as health goes.


Nancy's Niche profile image

Nancy's Niche 6 years ago from USA

This plan is not the best, but it is an improvement over what we have now. I understand the insurance companies are required to pay 80% of the medical fees submitted. The “can deny loop hole” is still alive and well though. Changes are needed to make it the plan the American people wanted. I hope that those changes will not go by the wayside. Congress has the unique talent of "appeasing" the crowd and then failing to follow through with the commitment...

Health Care Bill http://docs.house.gov/rules/health/111_ahcaa.pdf

Health Care Bill Explained http://edlabor.house.gov/blog/2010/03/affordable-h...


Dorsi profile image

Dorsi 6 years ago from The San Francisco Bay Area Author

hellohello) Thanks for coming by

ocbill) Individuals will still be required to have some type of insurance plan however (from what I understand)

billy) Yes it's messy and I am upset that some people are getting violent over this. Not right!!

ethel) Thank-you!

Nancy) Thanks for the links and I will check those out. The new health care reform bill obviously needs some tweaking but yes it's a start.


Springboard profile image

Springboard 6 years ago from Wisconsin

Dorsi, it's that "individual" part that's the real kicker, considering the subsidy provided by the government is based on your pay. If you are making $45,000 the government would subsidize $9,000, but at $50,000 it's only about $2,000. The advantage for employees to move around might be better, but moving up disadvantages them.

It's just one of many unintended consequences.

Another being the fact that large companies are now taking 100s of millions of dollars in charge-backs and write offs in order to account for and cover the additional costs to them because of the bill...

Which will decrease the tax rolls received by the government, and there go the CBO numbers once again. These would be...hidden costs. Unforseen costs.

...and it's only just the tip of the iceberg. :)

The bill is not totally bad, that's true. It's just MOSTLY bad, and that's the problem. I'm all for reform, but we needed to chunk this thing up into little pieces to ensure they could be hashed out and worked out much better.

It's because no one read the bill that we'll encounter numerous ongoing probems and costs. And the reason they didn't read it was because it was just too big.


Dorsi profile image

Dorsi 6 years ago from The San Francisco Bay Area Author

Springboard) Thanks for the comment. Very thoughtful and well written. I wonder if some things can be changed as they encounter problems with parts of the bill?

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