Pros and Cons of Obama Care Essay Example for Free

Pros and Cons of Obama Care Essay The Affordable Care Act withstood many trials on its way toward becoming reality, from epic congressional battles, to a pivotal Supreme Court ruling, to — finally — yesterdays Presidential election. Saul Loeb | AFP | Getty Images Obamas reelection means his health-care reform act has dodged its last bullet, and the age of universal mandates, penalty taxes and tax credits will almost certainly go into effect, although probably not exactly as scheduled on Jan. 1, 2014. What do you need to do to get your business ready? (Read more: Warby Parker CEO: Startups Focused on Health-Care Costs, Immigration Reform) Inc. put the question to health-care policy expert Henry J. Aaron, a senior fellow at Washington think tank Brookings Institution. Aaron offered three key ideas for entrepreneurs facing the enormous changes scheduled for health care during Obamas second term. 1. Weigh the Costs The key decision you will face is whether to sponsor a health-care plan, if you dont already have one, or to drop a policy you may have and leave employees to buy insurance on the exchanges themselves. The pros and cons of either route will depend on the size of your payroll, both in people and dollars. Do you have 50 or fewer employees? Then you arent subject to penalties for not providing an employee plan. On the flip side, helping employees pay for insurance affords tax advantages. If you have fewer than 25 full-timers on your payroll and their average pay is less than $50,000, the law affords you a tax credit of up to 35 percent for providing insurance today, rising to 50 percent in 2014. (Read more: Disaster Loans Soar as Businesses Struggle After Sandy) Theres a calculation to be done, said Aaron, if your employees are below the threshold (which tops out at 400 percent of the poverty line) for getting a federal subsidy to buy insurance on their own. In such a case, it might make sense to drop insurance and add the savings to your employees cash compensation. The question you should ask, Aaron said, is, If my employees are going to be eligible for subsidies, why should I leave that money on the table? If you have more than over 50 on staff, its a different story. If just one employee qualifies for insurance subsidies, and you dont provide insurance, that means tax penalties. 2. Check Your States Approach In theory, you should be able to buy insurance for your employees on the new health-insurance exchanges. However, states differ in how they plan to administer the exchanges. If youre running a small business, what prospects you face depend sensitively on where youre doing business, Aaron said. Some states, like Vermont, will take an active role, making sure a broad range of insurance plans will be available on the exchange. Many others leave it to the federal government to run the exchange for individuals and will leave employer-sponsored plans alone. The complexities are likely to create a mini-boom in the services of insurance brokers. Aaron suggest that you are likely to find them even more necessary than they are now in navigating the explosion in new options and rules. 3. Take Your Time Enrollment in the new health-care exchanges wont begin until October 2013 at the earliest. Legal requirements — and the accompanying fees for disobeying them — wont take effect until January 2014. Washington red tape probably could push those dates out even further into the future. Its a complicated bill, and its not drafted in a way to facilitate implementation, said Aaron. Delays could become inevitable and necessary. That might suit many business owners just fine.