This week, the Supreme Court will hear arguments from 26 states, joined with the National Federation of Independent Business, asserting that the Affordable Care Act is unconstitutional.

The Act, signed into law by President Obama almost two years ago, requires individuals to carry health insurance by 2014 either in an employer or state-based pool. Opponents of the bill say this mandate is a gross overstatement of Congress’ power, as it forces an individual to enter commerce that he or she should be free to opt out of. If Congress has the power to force an individual to purchase a good or service by virtue of interstate commerce, then what’s next? Small business owners, some represented by the assembly going before the Court, also argue that the effects of this mandate could drive up their premiums and have dire consequences on their cash flow.

Proponents of the Affordable Care Act say that the uninsured or so-called “opted out” folks typically end up seeking medical care anyway, so opting out shouldn’t be an option. When the uninsured seek medical care, they not only drive up the costs for the rest of the population, but the insured actually end paying for this expensive medical attention through taxes. In addition, the Act’s stipulations provide for an environment where all individuals have access to affordable medical care through the state-based exchanges and small business SHOPs (Small Business Health Options Program). The collective influence of these group exchanges puts more bargaining power in the hands of consumers and small business owners and out of the hands of the record profit-making insurance companies.

Behind all the argument, politics, and scare tactics, though, what does the Affordable Care Act really mean for small business owners? Do the NFIB members and 26 states represented in the assembly going before the Supreme Court represent the beliefs of small business owners? Well, sort of.

Some business owners are seeing benefits from the changes that took effect in 2010 as a result of the Affordable Care Act and would like it to stay as law. Mike Roach, owner of Paloma Clothing in Portland, Oregon, said that he’s already seen $5,500 in savings from his company’s health care premiums due to the tax credit his business receives.  And, in 2014, he’s looking forward to getting even better rates on premiums with access to the SHOPs.

Another business owner, Rick Tullis, owner of an air-conditioning installation company in Waco, Texas, however, has younger employees that often opt out of his employer-based plan. He is fearful of the cost his premiums will reach when consumers are required to carry health insurance by 2014, and his employees will likely start to opt in to his plan.

Interestingly enough, both of these small business owners are members of the NFIB. They’re differing opinions show that the assembly arguing the unconstitutionality of the Affordable Care Act doesn’t represent the consensus of small business owners — because there isn’t one. The projection of net gain or loss as a result of the Affordable Care Act’s statutes is almost entirely dependent on an individual business’s circumstances.

So, if it is upheld, what changes will the law have on health care premiums and the cash flow for your business? While you’ve likely already done some calculations, here’s an infographic that provides a simple breakdown:


Click to see full infographic

Click image to see full infographic

While each business and individual can project the effects, the economical impact the Act has and could have as a whole if it is upheld is still largely unknown, despite the dramatic speculations on either side.  Could the fixes the Act entails put power back in the hands of businesses and help our costly, ineffective healthcare system, or could this legislative mandate hurt businesses’ cash flow and create an unhealthy tipping point of Congressional power?

We’d love to hear from you!  How do you think the Supreme Court will rule, and what are the effects, if any, the law has had on your business?

Sarah Jordan

Sarah Jordan

Sarah Jordan is the VP of Marketing for PaySimple, the leading provider of service commerce solutions for SMBs. At PaySimple, Sarah leads the company's brand, acquisition, lifecycle, and product marketing strategies, and has been an integral player in growing the company from a fledgling startup to a leading SaaS platform, serving over 15,000 businesses across the country. She loves live music, being outside, great food, and hanging out with her husband, little boy, and dog.

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One response to “How healthcare reform affects small business owners”

  1. wow this is amazing and informative post ,thanks for sharing