With transition relief ending to the employer mandate for small businesses in 2016 (and their larger brethren in 2015 – though still classified as small businesses by the SBA) and the rise of employment costs, small businesses which account for ~70% of new private sector jobs and 50% of existing employment, are set to face a whole new level of costs.

As reported today, with insurance costs skyrocketing, employers are set to face a massive loss.  If we take ZH’s reported $500/month increase on top of these stats, we see that the average family insurance plan sits at around $1,950 a month now.  Of that, employers are going to be set to pay about half, or $975 a month.  At fifty employees that’s $50,000 monthly, or $600,000 annually.  This sits in stark contrast to the operating environment before the legislation was passed when “employers offered health insurance voluntarily”.

Even if, arguendo, there were other federal or state laws mandating insurance, the cost has risen sharply in the last years leaving both employers and employees saddled with a larger bill – a $500 net raise per month is $3000 more expensive, yearly, per employee for small businesses; at 50 people that’s a $150,000 spend. – or three full time employees.

Most importantly, at the end of the day the administration moved the onus of responsibly from the person to the employer.  And notably, it’s not a cost employers can pass on to funding entities – so it’s going to have to be borne by consumers by way of price increases, or by cutting costs (human capital).

Note, we’ve dissmissed the U.S. Treasury report that 96% of employers were exempted from these provisions as somewhat misleading: a random sample of the data provided by the SBA has 3x more people working in the 100+ firm size than the 0 – 20 person firm size (notably, 20 – 99 is clumped together and is therefore unintelligible in this analysis).


NEWSLETTER SIGN UP

Get the latest breaking news & specials from Alex Jones and the Infowars Crew.

Related Articles


Comments