On Thursday, the Supreme Court upheld the main components of President Obama’s healthcare law, with the most significant ruling upholding the controversial individual mandate piece. Here, the Court determined that Congress acted within its powers by requiring the majority of Americans to carry health insurance, under lawmakers’ taxing authority. The law is set to take effect on January 1, 2014, and requires all individuals, including small business owners, to have health insurance by that time or pay a penalty.

Small Business Impacts

According to a 2011 Kaiser Family Foundation Survey, 71 percent of firms with 10 to 24 employees offered health insurance in 2011; of those firms with 3 to 9 workers, only 48 percent offered insurance. Going forward, the biggest impact on small businesses is going to be that any company with at least 50 full-time employees will be required to either provide insurance or pay fines. However, this rule is projected to only affect around 200,000 small businesses, as over 96% of small businesses fall below this 50-employee threshold. In addition, starting in 2014, companies with up to 100 workers will have the option of buying lower cost health insurance through state-run employee-only exchanges. Employers may also be eligible for tax cuts on a percentage of the employee premiums they pay.

Reactions to the Court’s Decision

The National Federation of Independent Business lobbied hard against this law, and president and CEO Dan Danner called this “a tax on all Americans.” Likewise, Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council sees the ruling as an assault on the freedom that’s essential to economic growth. She posits that “entrepreneurship is on the decline in the U.S., and we need policies that will encourage risk-taking and start-up activity.”

However, many small business owners feel differently. Jody Hall, the owner of Cupcake Royale in Seattle, Washington, says, “The Court’s decision reaffirms what small business owners like me have been saying all along: we need to keep building on the ACA, not repeal it . . . I can’t afford to go back to the broken health insurance marketplace.” Many feel as well that the ruling has at least provided much needed clarity for small businesses, so that they now have a good sense of how they will need to move forward. As Makini Howell, owner of Plum Bistro in Seattle, Washington, explains: “In my business, I feel like I’ve now got greater certainty that I can count on the law’s health care tax credits and start getting ready for enrolling in the exchange in 2014. In the months ahead, I know other small businesses will benefit from hearing simple practical information about how to take advantage of all the things health care reform has to offer them.”


Harrison, J.D. “Mixed Emotions: Small Business Owners, Advocates Respond to Health-Care Ruling.” The Washington Post. 6/28/12. (6/30/12.) http://www.washingtonpost.com/business/on-small-business/mixed-emotions-small-business-owners-advocates-respond-to-health-care-ruling/2012/06/28/gJQAALaI9V_story.html.

Maltby, Emily. “What the Health Care Decision Means for Your Small Business.” Wall Street Journal. 6/28/12. (6/30/12.) http://online.wsj.com/article/SB10001424052702303561504577494582381825186.html.

Pagliery, Jose. “Health Reform: What’s at Stake for Small Business.” CNNMoney. 6/21/12. (6/30/12.)


Semuels, Alana. “Supreme Court Healthcare Ruling Might Provide Clarity for Businesses.” Los Angeles Times. 6/28/12. (6/30/12.) http://www.latimes.com/news/politics/la-pn-supreme-court-healthcare-ruling-might-provide-clarity-for-businesses-20120628,0,989272.story.

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