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Friday, July 26, 2013

Mid-Sized Companies Face Greatest Challenges Under ACA

by Sara Hansard

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Mid-sized companies that are subject to the Affordable Care Act’s large “shared responsibility” payments face the greatest challenges, Senate Small Business Committee Chairman Mary Landrieu (D-La.) said at a hearing July 25.

“The larger companies can take advantage of the lower rates for groups. The smaller companies will be able to pool their assets through the exchange,” Landrieu said at the hearing on small business concerns about ACA. She referred to companies with between 50 employees and 249 employees. Under ACA, businesses with the equivalent of at least 50 full-time employees are subject to the payments if they do not offer employees health insurance that meets the law’s definition of affordability and minimum value.

Small business owners testifying at the hearing showed both sides of ACA’s effects. A New Hampshire businesswoman who supports ACA testified that she has benefitted from tax credits of $1,100 a year since the law’s inception. But a Louisiana diner owner said he has decided to stop covering his employees when the employer mandate takes effect in 2015 because “the penalty, while huge, is less than the cost of offering the required coverage to all of our employees.” He also said he may close two of his least profitable restaurants and lay off 16 employees to reduce his full-time staff to below 50.
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