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Is Health Care Law A Budget Breaker For Small Business?

Updated: Saturday, August 3 2013, 04:08 PM CDT

The Affordable Care Act has survived the Supreme Court and that means a flood of new rules and options for businesses and employees. For some small businesses, the court's decision gives them a new way to shop for less expensive health insurance on state exchanges. But, for other business owners and their employees this could be a budget breaker.

One way or another, employees at small businesses are going to have to get health insurance by 2014. All the health care provisions that affect businesses directly survived the Supreme Court challenge. That means if you work for a larger company, with 50 or more employees, health insurance will be provided by the company or it will pay a hefty fine. If you're employed by a smaller business, with 50 or less workers, you could have to buy it yourself. And if you work for yourself the health insurance mandate requires you to get coverage.

Michael Whorton employs 40 people at Whorton Insurance Services. He already provides them with health insurance, but he also insures 1,800 other small and medium sized Texas businesses.

"We anticipate many of the employers paying the fine as opposed to purchasing health insurance now, which will force many of their employees into the co-ops that have been provided on a state-by-state basis," said Whorton.

Whorton says smaller businesses offering health insurance are facing tough choices. They can try to absorb the cost, pass it on to employees, offer less insurance coverage, or, depending on the business, let the cost trickle down to consumers. He thinks reining in medical costs is the only sure fix.

"The rates will continue to increase because the current national health care reform doesn't have any cost containment provisions and the ones that are present are very minimal," said Whorton.

Also today the National Retail Federation and the National Council of Chain Restaurants are speaking out. Both have worked to repeal the Affordable Care Act. They say the mandate on employers is both punitive and anti-growth.Is Health Care Law A Budget Breaker For Small Business?


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