An article in today’s Washington Post highlights the costs ObamaCare imposes on small businesses, and the dampening effect of the law on jobs and economic growth.
What the article does not reveal is that because the three businesses it examines are located in in Virginia, which has opted not to establish a health insurance “exchange,” Congress exempted these firms ObamaCare’s employer mandate. Yet the IRS is trying to impose that tax on firms in Virginia and 33 other states, even though Congress expressly forbids the agency from doing so. (Jonathan Adler and I explain here.)
An excerpt from the Post article.
Jody Manor has run a small cafe and catering company for nearly three decades in Old Town Alexandria, only a few blocks from where he was born. Six years ago he purchased an adjoining building, and more recently he started searching for a second location.
Whether he moves forward with expansion depends on the price tag of the requirements mandated by the Affordable Care Act, President Obama’s signature health‐care initiative.
Manor’s company employs 45 people. If he brings in just five more, his business would soon be subject to new minimum coverage standards under the 2010 law — and he does not know whether his current health plan would meet this threshold of coverage or how his premiums might be affected.
“These changes are less than a year away, and I still have no information about how much our premiums are going to cost,” said Manor, owner of Bittersweet Catering, Cafe and Bakery. “It definitely gives me pause when thinking about adding another location.”
Nearly three years after the health‐care law was passed…the picture remains anything but clear for small‐business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short.
“There is tremendous confusion and fear among many of my competitors and other business owners in my network, particularly about what you have to cover and how you have to report,” said Hugh Joyce, owner of James River Air Conditioning in Richmond. “In speaking to them, I am convinced that the primary reason we aren’t seeing a robust economic recovery is the uncertainty and costs associated with this health‐care law.”…
The situation only gets thornier for Joyce, who also owns a small art gallery with one full‐time employee. Rules proposed this year by the Internal Revenue Service suggest that workers from separate firms owned by the same person will be totaled to determine an employer’s ultimate size. If so, Joyce will probably shift his gallery employee to part‐time hours to avoid having to add coverage at his second business…
Meanwhile, many employers have seen their premiums rise or plans disappear as insurers prepare for the coming changes.
One in eight small‐business owners who responded to a survey by the National Federation of Independent Business said their health insurance providers had notified them that their plans would be terminated. A study released last week by Adecco, a human resources consulting firm, showed that nearly a third of employers said they stopped hiring or cut their workforce because of the law…
“If our cost trajectory continues, in five to seven years the premiums will eat up all my net profit,” Joyce said. “It’s already hard out there right now, particularly for small and medium‐size businesses. This may be the straw that breaks the camel’s back.”
I could “excerpt” the whole thing. Better that you just go there and read it.