How Obamacare Can Help Your Business Grow

NEW YORK (TheStreet) -- When Rob walked out of his high-flying corporate job to start a tech business, the cost of his health insurance with Blue Cross Blue Shield skyrocketed to $13,500 a year. In addition, he would face deductions of $15,000 to retain insurance for his family.

A shocked Rob turned to Pacific Source, his insurance agency at the company he just left. Contrary to his expectations, he received a rejection letter because of an antidepressant he had been taking. Rob is now on an Affordable Healthcare plan, which has saved him $5,200 a year.

Known informally as Obamacare, the Affordable Healthcare Act, or the ACA, provides millions of entrepreneurs like Rob access to group plans that were previously available only to employees of big-brand corporations. Small business owners are increasingly saying that the ACA will give a fillip to the national economy by safeguarding the health of their employees and freeing them up to focus on strategic business growth, rather than the drudgery of expensive and unsustainable health insurance formalities for their staff.

"The ACA succeeds in addressing how governments and organizations can integrate affordable living expenses into existing programs for entrepreneurs and their ventures," said Kimberly Adams, a managing partner for Flying Bridges, a social enterprise consultancy in Massachusetts. "As a small enterprise, there's no way we could ever afford insurance for our staff. But now, the ACA has made our business more competitive in terms of attracting top talent."

Questions have emerged in connection with how the ACA has hit a home run when a wobbly start to its roll-out last year became a Gordian Knot for Democrats and a bull's eye for Republicans. A few political analysts say that Mr. Obama has won the cooperation of reluctant pharma giants with assurances that the new universal healthcare program would enhance their bottom lines by at least 5% to 10%.

Beyond all expectations, more than 7.1 million people signed up for coverage under the ACA this year, exceeding a Congressional Budget Office estimate that at least 7 million citizens would enroll in the health insurance program from October 2013 through March 2014.

Experts at the Department of Health and Human Services are currently working on the breakdown data of these enrollees. While the exact number of business owners who registered on the federal government website remains unknown, it is logical to infer that small-business owners, company founders, entrepreneurs, self-employed professionals and independent consultants account for far more than half those sign-ups.

That's because small businesses currently make up about 99.7% of all U.S. employers and create more than 75% of net new jobs, according to the Small Business Administration. Small- and medium-sized enterprises also contribute nearly two-thirds to U.S. national output, or non-farm GDP.

Up until the ACA rollout, many small businesses were able to garner only half the health care benefits their employees should have had, for nearly twice the amount invested in their insurance plans. Not anymore.

The ACA offers subsidies to the tune of as much as 50% of the costs incurred to extend medical insurance to individuals who work in smaller-scale enterprises that have fewer than 25 full-time employees earning a salary below $50,000 a year on average. These subsidies, or tax credits, are adjusted for inflation beginning in 2014.

The Small Business Healthcare Tax Credit, originally introduced in 2010, was reinstated by the Internal Revenue Service in March 2014 with an announcement to raise the federal tax credit from 35% to 50% of the amount that private sector businesses contribute to employee health coverage through a SHOP Marketplace. The maximum credit for premiums paid by non-profit organizations is being increased to 35 percent from 25 percent.

The ACA will help businesses optimize their costs and enhance their resource efficiency in the long run. "In about 10 or 20 years, businesses would probably look back and say, 'that was long overdue,'" said Joseph Chinnock, 45, an entrepreneur consultant based in Boulder, Colo.

Meanwhile, Obamacare has come under fire for its imposition of fines on organizations that don't provide employee health insurance when they have 50 full-time workers or more. Whats more, many businesses, especially retailers and fast-food chains, are reducing the work-hours of their part-time employees to avoid paying for their healthcare.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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