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The Affordable Care Act and Its Affect on Business

In: Business and Management

Submitted By haughtonclark
Words 652
Pages 3
Owning one’s one business is the ultimate American dream. Over the years, however, the federal government has passed many laws regarding such. One such law is the Affordable Care Act, signed into law, by President Obama, in 2010. This law has become one of the most talked about, debated, and detested pieces of legislation. One question that a new business owner should ask is: how does the Affordable Care Act affect businesses?
The question “What is the Affordable Care Act” needs to be answered first. The Affordable Care Act (also known as ACA) was passed to provide affordable health insurance to everyone in America. America was told that if one already had insurance, he or she would be able to keep that coverage. What has actually ended up happening is that employers were forced to provide health insurance that met the minimum of coverage determined by the federal government. This has not only affected individuals, but also businesses.
Businesses now face having to pay extra taxes depending on the number of full-time employees. If a business has fewer than 50 fulltime employees, then the mandate, or tax, does not apply. However, if a business has more than that, a business faces a minimum $2,000 tax for each uninsured fulltime employee. If a business does not provide health insurance to employees, it faces the same type of mandate. The ACA has defined who classifies as fulltime. According to the ACA, if a person works 30 or more hours each week, he or she is classified as fulltime (PPACACON). This has removed the ability of a business to classify who is or is not fulltime. A larger business, employing 200 or more, is required, by law, to automatically enroll new hires in a health insurance plan (PPACACON). There are three ways in which the tax, or penalty, is calculated: “Play or Pay” rules, Nondiscrimination Rules, and Community Rating Rules (The Affordable

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