Gauging the Impact of Obamacare on SMEs

What options does the chief executive of an SME have to find the additional revenues needed to comply with Obamacare in today’s challenging economic environment?

This is the precisely the quandary facing Steve Laine, CEO of a California based consulting company. Laine’s firm currently spends $200,000 per annum on employee insurance premiums. In consulting with his broker, Laine learned his premiums could rise anywhere from 15% to 60%. Should, on the other hand, Laine cease providing insurance his business could face some $94,000 in penalties.

What makes this difficult situation worse for CEOs like Laine, is that no management decision provides a positive outcome. In Laine’s instance he will either a) pay a substantially increased sum of money to provide healthcare insurance for his employees, or b) cease providing coverage. Should he choose the latter, Laine stands to suffer such potential consequences such as losing employees to competing organizations that do provide coverage and receiving negative publicity.

While managing Obamacare might seem like a Sisyphean task for the chief executive, organizations from H & R Block to the National Federation of Independent Business have created space on their websites to assist in the decision making process.

And what of the individual citizen who purchases health insurance in the marketplace? How will he or she fare under the Affordable Care Act? Some experts and studies predict sticker shock for people with individual coverage, though others say the fears are overblown.

California is a good case in point. Some 38-million souls presently reside in California. It’s estimated that next year nearly 5-million Californians will be eligible to buy insurance through the marketplace, including thousands who have been previously denied coverage due to health issues. Covered California (the state’s official healthcare exchange) claims insurance rates for individuals will be falling, representing a “home run” for consumers. Forbes Contributor Avik Roy countered that claim, saying “Obamacare, in fact, will increase individual-market premiums in California by as much as 146%.” While some, including the Washington Post’s Ezra Klein have disputed Mr. Roy’s assertions, Covered California has not.

Nancy Pelosi (D-CA), in speaking about the Affordable Care Act once said, “we have to pass the bill so that you can find out what is in it.” Three years later, what have we found? A tremendously complex piece of legislation that will impact the nation for generations to come.





Source: New Hampshire Union Leader/How Obamacare will hurt my small business, others like it/October 30, 2012

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