In March of last year-after much polemics and debate-the U.S. Congress passed a healthcare reform bill which President Obama signed into law. Emotions ran high for both supporters and critics of the new law. Some argued that the bill would be overly burdensome on employers, especially small business; others said the bill aims to only help entrepreneurs. It’s important for small business everywhere to understand the general pros and cons of the new law. Commonly quoted as the Center of the Global Economy, New York small businesses, in particular, should take note.

Drawbacks of the New Healthcare Law

A particular drawback of the new healthcare reform bill for small businesses concerns healthcare premiums. The new bill offers health insurance premium subsidies for certain small businesses. The government determines eligibility based on income generated from two years prior to the current year.

The problem lies with income fluctuations many businesses, understandably, encounter. If a business experiences a large increase in income one year, the company may end up having to repay the subsidy the following year. Some say, however, this hinders the ability for small businesses to instead take that money, expand their business, hire new people and help create more jobs for the economy.

Another drawback concerns the new fine assessed to certain businesses that fail to provide health insurance for their employees. Under the bill, employers with fifty or more employees are required to provide health insurance for their employees or face a $2,000 fine per employee. Additionally, the coverage must meet certain minimum coverage requirements and 60 percent of the employee’s overall healthcare costs. Experts say that this cost may be too steep for some small business owners; forcing some to dissolve.

Benefits of the New Healthcare Law

On the upside, the healthcare reform bill does contain measures designed to help business owners, particular for those required to provide healthcare benefits to their employees.

The bill mandates the establishment of Small Business Health Options, also called SHOP Exchanges. Small businesses with 100 or fewer employees may pool together to purchase health coverage for their employees; helping to reduce costs.

The Exchanges, however, will not take effect until in 2014. In the meantime, though, the government is offering businesses required to provide health coverage a tax credit. Companies with 10 employees or fewer earning less than $25,000 on average per year are allowed a 35 percent tax credit.

It remains to be seen whether the new health care reform will help or hinder small business growth. Individuals with questions about how the new regulations will affect their business are encouraged to consult with an experienced business law attorney.