The ruling on the Affordable Care Act may provide the stability and certainty businesses need to hire. With the veil of uncertainty lifted, businesses can move forward with planning, and take steps needed to comply with the law, and potentially hire new workers.
“Now, there is a lot more certainty about what the rules are going to be. That might allow firms to move forward with their plans,” Gerry Wedig, an economist with the University of Rochester’s Simon School of Business, told the Los Angeles Times.
With the ruling from the Supreme Court in place, businesses have a much better picture of future costs and regulatory burdens they will endure. With a more certain landscape of the future, business can make a better assessment of cost and regulatory burdens imposed by the health care law.
Come 2014, the law requires businesses with more than 50 employees to provide insurance for employees, or be subject to a penalty.
“I guess that’s a step in the right direction,” Thomas Bracken, president and CEO of the New Jersey Chamber of Commerce told the New Jersey Herald.
Bracken adds that local business leaders tell him “it’s the uncertainties of Washington D.C., not the climate of New Jersey, that often are forcing them to put the brakes on development.”
The decision to provide health insurance by small business owners, however, may not be so concrete.
People making 400 percent of the federal poverty limit qualify to participate in the health care exchange. For a family of four, that means an income of nearly $90,000. Because businesses with less than 50 employees are not required to provide insurance under the law, they may opt to allow their employees to join the federally subsidized state exchange.
Brett Graham, Partner of Leavitt Partners who specializes in state health care exchanges, elaborated more with The Daily Caller on the issue of foregoing employer insurance for the insurance exchange.
“If your employer provides you what would be deemed an affordable plan,” Graham said, “You cannot turn that affordable plan down and take the subsidy — you have to take what your employer offers you.” An affordable plan for a single individual cannot cost more than nine-and-a-half percent of what the individual’s gross wages.
Graham continues, “If the person says, ‘I still don’t want it they can still go to the exchange,’ they just don’t receive a subsidy from the federal government.” Employer-provided insurance, therefore, may be bare-bones or even non-existent, at the small business level.
The U.S. Chamber of Commerce, however, emphasized the continued need for cost cutting reform in our health care system.
“It is imperative that policymakers and the business community now work together to develop and support genuine reforms that control costs, improve access, ensure quality, and promote wellness,” the Chamber announced in a press release.
In an op-ed, Jim Wunderman, CEO of the Bay Area Council, acknowledged that although members of his group feel that there are both good and bad components to the Affordable Care Act, what is important is the certainty it now provides for businesses, at least for now.
“While this week’s Supreme Court decision provides some level of certainty on ACA, it is not an end point. Indeed, the ACA is now likely to become a primary issue in the Presidential race, with Republican candidate Mitt Romney renewing his call to overturn it,” Wunderman writes.
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