Pros And Cons Of The Affordable Care Act

The Affordable Care Act (Obamacare) is considered constitutional because the penalties collected from uninsured citizens fall under the Congress’ power to levy taxes. In a New York Times article by Adam Liptak, Chief Justice Roberts of the Supreme Court stated in support of the Court’s 5 to 4 vote for implementing the ACA law that “because the Constitution permits such a tax, it is not our role to forbid it, or pass upon its wisdom or fairness.” Kathleen Swendimen states in her CRS Report for Congress that Chief Justice Roberts used similar reasoning in the Supreme Court case National Federation of Independent Business v. Sebelius stating that the “penalty for noncompliance” is validated by the reasoning that “the mandate is not a legal command

It is reasoned that the penalty’s implications are similar to other taxes because “it is to be assessed as part of the taxpayer’s annual income tax return, it varies by income and number of dependents; and, it is to be administered by the IRS.” The Affordable Care Act does not force anyone to have health insurance. Rather, it imposes taxes on those that choose to forgo participation in health insurance plans. The decision ultimately belongs to the individual who will decide between paying the penalty and enrolling in a health insurance plan, by most likely choosing the option with a lower opportunity

If there is any effect, the magnitude and direction of impact depends on the size and employee type composition of the business. Small businesses with less than 50 employees will experience no significant changes as they do not have financial requirements to consider and abide by. However, some do have the opportunity to save on costs by offering insurance through the new health insurance exchanges that are offered at the federal and state level. Many currently do not have state level exchanges. Small businesses are encouraged in the form of tax credits to offer health coverage or maintain their current coverage. According to the IRS, the credits cover up to 50% of an employer’s contribution beginning in January 2014, but there are some guidelines such that the number of full time employees cannot exceed 25 and annual wages cannot exceed $50,000 per employee. According to the NCPA, medium size employers with 50-100 employees may be affected the most because penalties will be assessed at $2,000 per full time employee, excluding the first 30 employees, if they refuse to “offer health insurance coverage to full time workers, and at least one employee receives a premium tax credit or subsidy when purchasing insurance through an Exchange” (“A Skeleton Analysis of Obamacare’s Impact on Business”). Full time workers are defined as working 30 or more hours per