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What health care reform means for small businesses

John Dimsdale Mar 26, 2012

Adriene Hill: It’s day one of Supreme Court arguments over the constitutionality of President Barack Obama’s massive health care reform. The challenge is being brought by 26 states — and also small business organizations. They say the health care law will mean fewer jobs.

Marketplace’s John Dimsdale reports.

John Dimsdale: The new law requires employers to offer health insurance or pay a fee. It also raises Medicare payroll taxes. The National Federation of Independent Business is challenging the mandates and taxes. The NFIB says the Affordable Care Act is an overreach of government power that makes it more expensive for smaller businesses to create jobs.

But MIT economics professor Jon Gruber says the new law offers businesses more predictable insurance premiums.

Jon Gruber: Today, small businesses can see their premiums go up and down by huge amounts year to year, simply because an employee gets slightly older or slightly sicker. That will end under the Affordable Care Act because they’ll be in one larger pool that’s not rated depending on employees health.

Besides, Gruber says, businesses with fewer than 50 employees are exempt from new taxes and mandates. After three days of arguments before the Supreme court, justices will weigh in in June.

In Washington, I’m John Dimsdale for Marketplace.

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