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TheStreet Open House

Small Businesses Struggle With Obamacare

Sam Caucci, principal and founder of Sales Huddle Group, a sports sales consulting and training company, also says the delay is positive for small businesses.

While his company is below the 50-employee threshold with 14 employees, "any increase in their operating expenses is a direct effect on the money they spend on training," Caucci says. "It would definitely make us more sensitive to bring on staff."

But other small-business owners fear it's just a political ploy to get the mandate requirements out past the mid-term elections.

"All this does is underscore the lack of planning and the inability of the administration to set any kind of clear planning tools for the small businesses and that's why the economy will continue to chug along at an abysmal pace, because small-business owners like me and others can't really make any plans because what's up today is down tomorrow," says Ed Jerdonek, CEO of Luckett & Farley, an architecture firm based in Louisville, Ky.

The controversial health care law, meant to provide more individuals with affordable health care, requires employers with 50 to 199 full-time workers to either provide health insurance or pay a tax penalty of $2,000 per employee (provided the employee gets subsidized insurance from the government), according to health insurance experts. Businesses with fewer than 50 employees are exempt from the ruling, but self-employed individuals will be required to purchase insurance, or else pay a tax of as much as 2.5% of household income.

Observers say the law also serves as a threat to small-business growth. Some small businesses that already provide coverage say the added costs of reporting and rise in health insurance premiums are a potential detriment to investment. For business owners with fewer than 50 employees, some are already holding back from hiring extra workers for fear of going over the 50-employee threshold.

Luckett & Fairley is an example of a company that already offers health insurance and benefits to its 80 employees, but The Affordable Care Act will impede on its ability to do small acquisitions it may have otherwise have made.

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