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Small Business and United States Economy Essay

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In this essay it will be addressing the upcoming healthcare known as Obamacare. What is Obamacare? Obamacare is a new law signed by President Barack Obama; its main focus is to provide affordable health care, whether the American people like it not. If an American chooses not have health insurance, an individual could be fined. As Obamacare approaches and becomes into effect in approximately 6 months it has become one of the most controversial subjects affecting the American people today. There are a handful of people who are happy with the upcoming Obamacare, however a majority of small business owners are very undecided on the whole idea.

A lot of them, as are many Americans do not like the idea at all. Small business owners will have to make difficult choices that will not only affect them as the owners but will affect their employees as well. Small business owners have to choose if they would like to provide healthcare for their employees, pay fines for not having coverage for their employees or lay off their employees to avoid the first two choices, this having an overall effect on how their businesses will run.

Therefore these small business owners have to decide when considering the upcoming Obamacare, will it be a good thing or bad thing for their company.

The majority of these owners have come to the conclusion, saying that Obamacare will hurt their businesses from expanding. Thus causing loss of upcoming jobs and maybe even shutting down some of the small businesses in our country. One of the next bubbles in the United States economy waiting to burst is healthcare in general. Due to the high cost of healthcare growing faster than the current state of the United States economy. A concern for the rising cost of healthcare is that it will affect larger corporations, our government and the consumers themselves who will all be forced to pick up the remaining cost.

Surprisingly enough with the rise of healthcare cost there are still over 40 million American people with no type of healthcare coverage. This paper will show also how the Obamacare has been and still is very confusing to the American people. There are those who thought it would be either free or at least at a low affordable cost. So far the results are not showing differently as Obamacare falls into place. Those being forced to carry their own coverage are seeing the affects it will have on their finances thus creating financial worries. Hiring on Hold Healthcare premiums are on the rise in the US.

More than half of businesses have stopped hiring, to stay away from 50 full-time employees where they have to require health benefits. Some businesses that aren’t hiring often hire part time workers to help them stay under the full time cap. Individuals that are older are having problems finding jobs because companies are scared to take a chance on their healthcare cost. (Jindal/ Walker, 2013, A. 11) One major effect of Obamacare is that a lot of small business owners will have to put a freeze on hire more people to expand their company. Obamacare will have a huge affect on small businesses.

A lot of businesses will have to put a freeze on hiring because they cannot afford healthcare. (Pipes, 2013, p. 1) If a small business were doing good and had a lot of employees, because of Obamacare many of those businesses will have to trim down. (Pipes, 2013, p. 1). To help save money, small businesses will be cutting their full time employees hours. (Pipes, 2013, p. 1) Putting a halt on businesses from growing is caused by Obamacare because it has mandated that businesses with 50 or more employees are required health care. (Pipes, 2013, p. 1) How is someone supposed to grow their business if the cost of healthcare increases?

Small businesses are the backbone of America and with a lot of them not hiring more, will hurt the American economy. The fear of the Affordable Care Act also known as Obamacare, fear for a small company is the effect on their bank books. (Mangen, 2013) This is why many companies are not hiring or even laid off employees. A little less than half of companies surveyed have not hired new employees in the wake of Obamacare. (Mangen, 2013) Nineteen percent of companies said they have lain off employees as a direct result of Obamacare. While other businesses have cancelled or delayed plans to expand their business.

Small companies are split when it comes to how they view Obamacare with a little less than half the owners believe it’s bad for their bottom dollar: while 39 percent believe there will be no impact at all. (Mangen, 2013) “In addition to restricting hiring or cutting jobs, small companies are considering other ways to mitigate the expected financial fallout. Twenty-four percent are weighing whether to drop insurance coverage, while 18 percent have “reduced the hours of employees to part-time” in anticipation of the ACA’s effects, the poll found. ” (Mangen, D, 2013) Healthcare Cost Increasing

Another major impact of Obamcare is the cost of it. Obamacare will affect a lot of small businesses. The cost of healthcare will increase, which in turn will make running a business more expensive. Obamacare will bring along new taxes and mandates for the businesses. Obamacare is taking away from the business freedom, it is very unconstitutional and will affect many businesses. (Danner, D 2010). The cost of healthcare will be so high for some businesses that the business that has been around for several years, may have to close their doors for good because of a mandated law that requires them to have health insurance.

When Congress was writing Obamacare, its supporters said that the new law would help small businesses. Generally, the cost of Obamacare was suppose take the cost pressure off businesses. Ironically, it had the reverse effect making the businesses have more pressure. Obamacare was sold as a way to give small businesses new, cheaper sources of insurance through their own health exchanges. (Nather, 2013) A lot of small businesses will not be able to offer their workers a choice of healthcare, which undermines the main reason to have health insurance for a small business.

Since small businesses don’t have a big human resource department, it’s harder for them to follow the new rules and requirements. (Nather, 2013) “If they do offer health coverage, it has to meet the law’s “affordability test. ” A worker shouldn’t have to pay more than 9. 5 percent of his or her income for self-only coverage, and the plan shouldn’t cover less than 60 percent of the costs. If the coverage fails either of those tests, the employer will have to pay a $3,000 annual fine for each worker that goes to a health exchange for coverage and gets a subsidy for it.

” (Nather, 2013, p. 1) Confusing Law The politicians have talked about it continually. Supporting groups have spent countless hours promoting it by television or social networking. Yet many Americans are stubbornly confounded about Obamacare. This confusion stretches across many states, different ages, and of course different races. Obamacare implementation dates has come and gone, and for small business owners it may look the same, however, it is more confusing than ever and more expensive. (Danner, 2013).

The National Federation of Independent Business has been taking calls from all over the world from small business owners who are quite confused or unsure of the obligations under the new law. It seems the government’s celebrity campaign designed to attract more young people to sign up for insurance is heavy on charisma but light on details. In the short term, the biggest challenge for businesses and individuals will be complying with a law they do not like and do not understand. In the long term, their challenge will be paying for a law that could cause them to lose their businesses (Danner, 2013).

“The government has done precious little to explain the laws many obligations to Americans. This includes the failure to inform millions of small employers about the Notice of Coverage Options requirement. Under this obscure provision, all employers must formally provide employees with notice about their health insurance options – regardless of whether they offer insurance or not. This notification was required by Oct. 1, but it’s likely that thousands of small-business owners are still unaware of it. ” (Danner, 2013, pg. 1) Conclusion

In conclusion, the problem here in America is the rise of healthcare cost because of the new law that will be coming in the near future, known to many as Obamacare. As I stated in my paper, Obamacare will have a huge effect on small businesses. Small business will have to put a freeze on hiring, which will cost them from expanding their company. Also, small businesses will have to cut employees hours to stay within the law of Obamacare. There is more bad then good when it comes to Obamacare. Like my problem statement stated: One of the next bubbles in the United States economy looking to pop is healthcare.

This is due to the cost of healthcare growing faster than the current state of the United States economy. As part of the problem statement stated in the introduction: Concerns for the rising cost of healthcare is that corporations, government, and the consumer themselves will be made to pick up the remaining cost. Surprisingly enough with the raise of healthcare cost there are still over 40 million Americans with no healthcare coverage. Small businesses are the backbone of America, without them America will no longer be home of the free, where a lot of people come and want to start their own company.

I leave you with this, Obamacare has affected the way our businesses will run forever, small business will no longer enjoy having a business because in the back of their minds Obamacare will always be there. References Danner, D. (2010, May 27). ObamaCare vs. Small Business. Wall Street Journal. Danner, D. (2013, October 3). The Obamacare deterrent for small business; Confusion over the rules for compliance is stifling job growth. The Washington Times Jindal, B. , & Walker, S. (2013, Jul 26). Unworkable ObamaCare. Wall Street Journal. Mangen, D. (2013). Obamacare Causing Nearly Half of Small Businesses to Freeze Hiring: Poll.

Retrieved October 3, 2013 from http://www. huffingtonpost. com/2013/06/19/obamacare-small-business-hiring_n_3468498. html Nather, D. (2013). How Obamacare affects businesses – large and small. Retrieved October 3, 2013, from http://www. politico. com/story/2013/09/how-obamacare-affects-businesses-large-and-small-97460. html Pipes, S. (2013). As Obamacare’s ‘Compassionate’ Reality Sets In, Companies ‘Cruelly’ Cut Health Benefits. Retrieved September 27, 2013, from http://www. forbes. com/sites/sallypipes/2013/09/02/as-obamacares-compassionate-reality-sets-in-companies-cruelly-cut-health-benefits/

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