It was nearly a year ago that the United States Supreme Court upheld the main provisions of the Patient Protection and the Affordable Care Act (PPACA).  Since then, the uncertainty surrounding the implementation of PPACA continues and there is no shortage of opinions on what this will mean for small businesses.  Closer to home, most Massachusetts business owners of all sizes are not sure of what this will mean to them.  While living with health care reform for seven years might condition Bay State businesses for what is to come, there is much more to consider.

National Perspectives

In a report released recently by the National Federation of Independent Business (NFIB), findings showed that nationally, 42% of small businesses (employing 50 or fewer) were offering health insurance one year after passage of the Patient Protection and Affordable Care Act (PPACA).  The report also stated that a mere 1% of small employers added health insurance, while 4% dropped it.

The NFIB (which was the plaintiff in last year’s Supreme Court decision) has about 350,000 members.  The average workforce size of an NFIB member is 10.  Given that PPACA does not require businesses with fewer than 50 employees to participate, it appears that the NFIB’s concern is largely the result of additional tax burdens that might be universal in nature.


Closer to Home

Here in Massachusetts, some tell a different story.  In an article written for by Dylan Scott, he cites the findings of Michael Widmer, the president of the Massachusetts Taxpayers Foundation, who contends that “the percentage of small businesses that offer health insurance has increased from 70 percent to 77 percent since then-Gov. Mitt Romney signed the bill into law in 2006. An estimated two-thirds of the public still express support for the reforms.”

So are we living in a bubble here in the Commonwealth?  Perhaps we are.  Even before the implementation of health care reform in Massachusetts, more citizens were covered by health insurance here than in most states.  Today, Massachusetts leads the nation.


Bay State Businesses in a Health Care Bubble

After seven years of health care reform, the insurance “connector” in place, and most businesses offering health insurance to their employees, it would appear that PPACA’s impact on the Massachusetts small business community might be minimal.  In a previous post, we pointed out some of the rating practices that could impact health insurance costs for small businesses.  Would a succession of double digit increases in rates for the next few years for the small employer be enough to burst the Bay State bubble?  Perhaps.  But for some employers, tax credits and other incentives may help mitigate the impact.  It remains to be seen.

The only certainty is that in the near term, uncertainty will reign for many businesses.  But this too is certain – the PPACA train has left the station and the whole country will be affected.  And the dose of legislative medication taken by Massachusetts small businesses a few years ago will not make them immune to the changes that are coming.