- Published: August 27, 2022
- Updated: August 27, 2022
- University / College: The University of Alabama
- Level: Doctoral Studies
- Language: English
- Downloads: 9
Affordable Care Act Affordable Care Act Thesis: Americans need to access health insurance that is affordable. Affordable Care Act demands that Companies with 50 or more staff give health insurance to the staff members. Companies that do not comply with the act are supposed to pay penalties. Implementation of the act is surrounded by contention. New cost of labor and taxation rules will likely damage economy and job creation. The implementation of the act has therefore been postponed.
1. Background. President Obama signed into law the Affordable Care Act and Protection of Patient into law on 23rd of March 2010 (Tammy, 2013). The act intends to offer all citizens of America a health insurance policy that can be easily affordable. This is in line with the main goal of achieving better health care in the United States. Employer is required to sign and implement the new act. This is supposed to affect companies with 50 or more staff members. The staffs are supposed to be given the health insurance. Failure to adhere to the new rules will see companies getting stiffer penalties. The act comes as a reprieve to the employees but serious issues still arise on the side of employers (Tammy, 2013). These challenges that have led to the delayed implementation of the act include:-
a. Tax liability. Taxes imposed are likely to impact negatively on the companies especially the small businesses. Marginal profit will be reduced.
b. Hiring. Costs involved in hiring new labor appear to be high according to employers. Business will prefer to have less than 50 employee to be exempted from the Affordable care Act.
2. Tax Liability. Employers with the threshold of 50 or more staff are legally required to give health coverage to their staff. Failure to adhere to this they are to pay tax penalty which will increase annually. Estimates indicate that in 2014, the penalty will amount to $47. 50 per child and $95 per adult or 1 percent of the household income that is taxable. In 2015, the penalty will be $ 162. 50 per child and $ 325 per adult or 2 percent of household income that is taxable. In 2016, the penalty will amount to $347. 50 per child and $695per adult or 2. 5 percent of household income that is taxable. In each case, whichever option is highest will be considered. After 2016, there will be an increase annually in the penalty centered on the increase in living cost (Tammy, 2013). The penalties impacts negatively on small business that might be forced to go through severe losses and even shutdown.
3. Hiring. Research indicate that there will be a less of approximately two million people employed on full time basis in 2017 as compared to the number working in the nonexistence of the new law. Big and small companies are likely to reduce the rate of hiring, the small companies being the most affected. ACA can hasten the deterioration in employment in small business by reducing both the need of workers in small business to offer labor and the need of owners of small business to demand labor (Tammy, 2013). Employer in small business will prefer to have less than 50 staff.
4. Conclusion. Tax liability and cost of hiring new labor impacts of the ACA. Reduction in employment and the decline in businesses will lead to a staggering and decline in economic growth. Economic growth is vital in the United States. Consumers are important in the economic growth of the United States. When businesses decline, the rate of consumption also goes down. America growth directly affects growing and poor nations. It is therefore necessary that the implementation of the law to stay on hold until proper adjustments is made mainly to protect small business. Nevertheless, citizens of United States deserve an improved health quality.
Tammy, L. 2013. How Does the Affordable Care Act Impact Your Small Business? Available from: http://blog. intuit. com/employees/how-does-the-affordable-care-act-impact-your-small-business-infographic/