The United States Supreme Court largely upheld the Affordable Care Act in a 5 to 4 decision, marking a major victory for the Obama administration and greatly impacting small businesses.
The bill is loaded with tax credits and incentives for small businesses to provide affordable health-care options to workers. These tax credits can benefit companies like ours by reducing our costs and therefore allowing us to reallocate funds to other key areas of the business.
The bill requires companies with more than 50 employees to provide health coverage to their workers by 2014. The leading reason small businesses have stopped offering coverage is that the average family premium for small business workers increased more than 120 percent in the last decade.
Small businesses can simply no longer afford to allocate funds to provide this type of benefit to workers. With an economy trying to get back on its feet, the majority of firms have neglected spending in this area to keep their businesses afloat by investing in other areas including technology, innovation, and even reducing debt.
This new law offers tax credits to qualifying small businesses. The White House has stated that “an estimated 4 million small businesses nationwide could qualify for a small business tax credit this year, which will provide a total of $40 billion in relief for small firms over the next 10 years.” Eligible businesses can also expect to receive a credit for up to 35 percent of their contribution toward employee premiums through 2013, which will increase to up to 50 percent in 2014 and beyond.
Tackling the ongoing problem of rising health-care premiums and our constant focus on cutting costs, this bill seems to provide the relief that entrepreneurs and small business owners have longed for while also helping workers save money by providing affordable options.
Our company, WebiMax, spends close to half of a million dollars each year providing health-care coverage to our staff of 130 workers. With the items outlined in the Affordable Care Act, we expect to receive tax credits totaling 35-40 percent. These savings will help us continue to expand our business and reduce debt so that we can move closer to our anticipated IPO in 2014.
Not only are we fully anticipating to leverage these savings by reinvesting, the majority of small business owners I have spoken to plan on using the savings toward hiring and reinvesting in technology to become more competitive in their respective industries.
Small businesses often compete on a global level and typically offer the same services as larger firms, but with enhanced transparency and often lower prices. Generating some sort of additional savings will become a major benefit to entrepreneurs and small business owners.
Kenneth C. Wisnefski is an online marketing expert and founder and chief executive of WebiMax, an online marketing agency in Mount Laurel, N.J. His firm specializes in search engine optimization, reputation management, search engine marketing, pay-per-click management and social media marketing services.
How did your company react to the health-care ruling? Do you think the law will have an altogether positive or negative impact on small businesses? Please share your take in the comments below.