How Health Care Ruling Impacts Small Business

Small business owners have mixed reactions to news the Supreme Court has upheld the Affordable Care Act. Some are happy with the outcome and relieved. Others are concerned about what comes next.

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Throughout the health care debate, the plight of small business owners has been a recurring theme. Their premiums are often much higher than those paid by big business. The Obama administration argues its health care legislation will lower their costs and expand options for coverage, but opponents argue the opposite.

Today's small business owners had mixed reactions, as we hear from NPR's Wendy Kaufman.

WENDY KAUFMAN, BYLINE: Zachary Davis, owner of the Penny Creamery, a two-year-old make-it-from-scratch ice cream company in Santa Cruz, California, was heartened by today's ruling.

ZACHARY DAVIS: I feel like it offers us the best chance to be able to offer our employees affordable and quality health care.

KAUFMAN: But Betty Neighbors, founder and president of the TERRA Staffing Group, a recruiting and staffing firm in Everett, Washington, fears her company's health care costs could rise exponentially, and Neighbors has a larger, more fundamental concern too.

BETTY NEIGHBORS: Clearly, when the federal government can mandate that every American purchase something, it is a very serious assault on our freedom and individual liberty.

KAUFMAN: Neighbors is an active member of the National Federation of Independent Business. The organization which represents primarily very small businesses was one of the named plaintiffs in the lawsuit. And today, the organization vowed to fight in Congress for a full repeal of the law. One of its provisions requires that businesses with 50 or more full-time employees or an equivalent number of part-timers provide health insurance to their workers or pay a penalty. Neighbors fears she might have to provide coverage for thousands of temporary workers she places in jobs.

NEIGHBORS: So we're looking at going from maybe $100,000 in premiums per year - what we are paying now - to well over a million.

KAUFMAN: She would try to pass on those costs but worries that clients will try to figure out a way to do without her services because they don't want to absorb those added costs. Frank Reardon, the president of Becker Trucking based in Tukwila, Washington, also worries about costs. Right now, he provides insurance for his 100 or so workers, but the law calls for states to set minimum standards for coverage. And if he needs additional coverage, he may have to pay more, and that could mean fewer raises for his employees.

FRANK REARDON: If it goes to medical, it's going to have to come out of wages.

KAUFMAN: But Reardon also harbors a hope that premiums could actually decline under the law. He says with the individual mandate in place, there will be fewer uninsured individuals that those with insurance end up paying for.

REARDON: Maybe insurance costs are higher because we're doing that. If everybody has to contribute to the insurance programs, will that bring the overall costs down, or is the amount of regulation and reporting that's going to come with it, is that going to neutralize that?

KAUFMAN: The trucking company president says we'll just have to wait and see. But Jody Hall, owner of Seattle-based Cupcake Royale, says she's already seen some positive impact. Like many other small businesses, Hall has seen her premiums rise 15 or 20 percent or more year after year.

JODY HALL: This year, because of health care reform, our insurance went up only 5 percent. That is unprecedented.

KAUFMAN: Zachary Davis, the Santa Cruz ice cream maker, is also hopping for premium reductions, but he's also looking at the long term. Most of his employees are young, and now, he says, they will have insurance.

DAVIS: I think it's something that a lot of them couldn't have expected a couple of years ago, and now, they will. And we have a lot of interest and a lot of concern for their future, and it's really going to mean a lot for them.

KAUFMAN: The Supreme Court has now clarified many things, but as Davis and the others know, there's an election in November, and things could change. Wendy Kaufman, NPR News.

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