How will the Affordable Care Act affect small business health care costs?

Nov 20, 2012

Papa John's 3000th North American Store Celebration

Papa John’s Founder, Chairman, and CEO John Schnatter (right) and President of the Papa John’s Chicago Marketing Co-op Sid Ruckriegel (left), in Burbank, IL on Monday, October 24, 2011. Credit: Ross Dettman/AP IMAGES FOR PAPA JOHN’S

President Obama’s recent reelection assures that his signature first term legislative accomplishment, the Affordable Care Act (ACA), will remain on its path to full implementation. Resistance from some small business leaders has not abated in the aftermath of Obama’s win and some of the more vocal opponents have included representatives from  Applebee’s, Denny’s and Papa John’s pizza chain’s CEO, John Schnatter, who has hinted that the pizza chain would reduce employee hours to offset additional costs that may be faced with the implementation of the ACA.

But most businesses aren’t as big as Papa John’s, and the new rules will have an effect on how they approach paying for health care for their employees. Research has shown that a significant percentage of small businesses are confused about the new rules of the ACA and may also be misinterpreting how it will affect their financial accountability. But a House Ways and Means Committee estimates that small businesses stand to save billions – as much as $422 billion over ten years – if they get rid of their health coverage by 2014, the point at which part of the ACA goes into effect and the federal government will begin to subsidize health insurance for Americans earning less than 400 percent of the Federal Poverty Line.

Just how will the Affordable Care Act affect America’s small business owners and their employees? Will it change how you manage your business?


Kavita K. Patel, adjunct assistant clinical professor at UCLA’s Geffen School of Medicine

Stuart Waldman, Valley Industry & Commerce Association (VICA)

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