Changes

A temporary health insurance tax credit is available to firms with 25 or fewer employees and making less than $50,000 in annual wages. However, many firms do not meet the strict requirements necessary for obtaining the tax credit that would cover up to 50 percent of employer contributions to employees' health insurance premiums and up to 35 percent for tax-exempt employers. According to Holly Wade, the director of research and policy analysis for the NFIB Research foundation, "the small business tax credit is a better talking point than it is a financial incentive for small businesses" [24http://www.bizjournals.com/bizjournals/washingtonbureau/2016/03/why-obamacares-tax-credits-failedsmall-businesses.html]. For small businesses that are nearing the 50th FTE mark, however, the 51st hire presents a very large marginal cost to the firm. Firms that employ 50 or more FTEs and fail to provide qualified health insurance coverage must pay a tax penalty of $2,000 for each uninsured employee beyond the first 30 employees, possibly dis-incentivizing small firms from expanding their labor forces. Furthermore, firms that employ more than 50 workers must contribute, at a minimum, 60 percent of the cost for employees' coverage. [13http://www.ncpa.org/pub/st356]. This increased marginal cost for the 50th employee serves as a reason why many critics of the ACA believe that the ACA is “killing jobs” and also why many small business owners have concerns about expanding their businesses.

In 2012, two years after the introduction of the ACA, Gallup and Wells Fargo conducted a survey of 600 small business owners. The survey revealed that 48 percent of small business owners pointed toward "potential healthcare costs" as a reason for not hiring more employees.[http://www.gallup.com/poll/152654/health-costs-gov-regulations-curb-small-business-hiring.aspx] According to another survey conducted by the Society for Human Resource Management of more than 600 small business owners, more than four out of ten small business owners have delayed hiring due to uncertainty about the effects of the ACA, and one in five small business owners reported that they have cut their number of employees [http://www.ncpa.org/pub/st356] Uncertainty surrounds the effects of the ACA on small businesses due to the many delays and exemptions in the rollout process of the ACA’s mandates and provisions, especially in analyzing the effects on relatively larger small businesses that are now required by the law to provide health insurance to its employees, as the employer mandate penalty for firms with greater than 99 employees was delayed until 2015. Considering both the status quo and general trends of the health insurance market, it seems unlikely that the ACA will turn out to be the job-killer or enemy of small business it was predicted to bed. While insurance premiums continue to rise for the firms that provide employer-sponsored health insurance to its employees, the bill should not seriously harm small businesses and startups with fewer than 50 full time equivalent employees. Head of the CBO, Douglas Elmendorf, doesn’t believe “the healthcare law is having a significant impact on the economy today.” Elmendorf predicts that the law may “reduce the amount of labor used in the economy by about a half a percent at the end of the decade,” but this will mostly be voluntary, as people will choose “not to work because they can obtain health insurance at an affordable price outside of the workforce”workforce.”[25http://obamacarefacts.com/obamacare-small-business/] Even if ACA itself may turn out be a tentatively benign, if not beneficial, policy for small business in the long run, the critical question remains: where do the two 2016 U.S. presidential candidates stand on the issue? Hillary Clinton's website claims that she will "be the small business president," vowing to defend the Affordable Care Act, strengthen its benefits, and minimize the law’s detriments to small business. Donald Trump on the other hand vehemently opposes the Affordable Care Act, stating that he will request a congressional repeal of the act on his first day in office.

Even if ACA itself may turn out be a tentatively benign, if not beneficial, policy for small business in the long run, the critical question remains: where do the two 2016 U.S. presidential candidates stand on the issue? Hillary Clinton, whose website claims she will "be the small business president," takes a strong stance for the law, vowing to defend the Affordable Care Act, strengthen its benefits, and minimize the law’s detriments to small business. Donald Trump on the other hand vehemently opposes the Affordable Care Act, stating that he will request a congressional repeal of the act on his first day in office. Moving forward in American healthcare system reform, it is important to consider the possibility of the ACA’s effects on small businesses growing more pronounced or remaining neutral. Regardless the outcome of the election, the American population and economy requires a U.S. Congress and President who are willing and prepared to reap the potential benefits of the ACA - increased coverage for millions of Americans- and reform and protect against the potential detriments of rapidly rising premiums. Instead of introducing preemptive policy to replace or eliminate the ACA, a more measured, nuanced, and methodical process should be followed, to ensure that access to affordable and comprehensive health insurance coverage is available for all citizens.