Small businesses in New Jersey have many laws and regulations to be aware of, understand and follow. One controversial law affecting many small businesses is the Affordable Care Act, also known as Obamacare. This law mandates that, starting in 2015, employers with more than 50 full-time employees offer health insurance to workers. A survey of 542 small business owners shows that 40 percent are still confused about the law and how it will affect them.
Even if a company has fewer than 50 employees, there are still concerns. For example, Medicare tax increased by 0.9 percent for self-employed individual who earned more than $200,000 in 2013. In addition, companies that do offer health insurance to employees can expect premiums to increase by up to 5 percent.
Obamacare is affecting the growth of many small companies. Approximately 20 percent of those surveyed are putting hiring on hold. In addition, 25 percent are not planning on opening any new locations anytime soon. Many companies feel they are unable to afford to hire more workers because this may cause them to exceed the 50-employee threshold. If they are forced to offer healthcare, they could end up losing money in the long run.
According to Obamacare, companies with 50 or more full-time employees must provide healthcare insurance - or pay a fine. A person working 30 or more hours a week is considered full-time. With a $2,000 penalty per worker, many companies may take a risk and face the fines or simply cut workers' hours. If business owners are not properly educated about what they must do to stay in compliance, Obamacare could do more harm than good.
Source: Inc., " Small Business Owners Still Confused About Obamacare," Adam Bluestein, Jan. 3, 2013