How the health care bill will affect businesses...

More than a year in the making the health care bill has finally passed. If you have recently awaken from a coma, or were too busy Tweeting about what you had for breakfast to know whats going on, I'll fill you in. The health care bill will enact many changes in our health care system over a period of 8 years. Some notable changes: individuals will be required by law to carry health insurance, the insurance industry must pay an annual fee of 8 billion dollars to the government (I think it should be more if anything though), and pro-rated subsidies will be given to people below just above the poverty line anywhere below it. What I want to focous on though is how the bill will effect businesses. It is proven that the free market is perhaps the most efficient system to encourage institutional, commercial, and economic developments. However, we don't yet know how the mandates of our government will effect the businesses we rely on to spearhead progress. Here's what the bill means for businesses:

• Subsidies begin for small businesses to provide coverage to employees. (2010)
  
• Employers with more than 50 employees that don't provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees. (2014)
• Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer's contribution. Tax credits phase out for larger businesses. (2014)
• Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits it. (2017)

These facts are from the Wall Street Journa. If you interested in the year by year components of the check out the link : http://tinyurl.com/yg8yqnw

It is my opinion that by mandating that businesses supply their employees with health care the current average quality of business owner-employee relations can only improve. By carrying the responsibility of providing their employee's with health care, business owners will think twice about who they hire, and develop stronger relationships with the people they do hire. This is because their cost per employee is higher, so the risks of hiring a sub-par employee are higher. Basically, I predict that employee retention rates will rise, although many analysts state that we are growing into a more transient job market. However, the potential downside of this mandate is that the additional costs of providing health care might limit new hires for small and medium sized businesses. Hopefully by the time that businesses must start providing these services-starting 2014-the economy will have recovered to a state that more closely resembles 2006. By providing subsidies for small businesses this year, the Obama administration is trying to pressure the private sector into making the change now, instead of waiting for 2014. Overall, I think this bill is good thing for businesses and consumers because it provides more opportunities for coverage. Of course, I personally believe that health care is a basic human right and should be guaranteed to all citizens at birth- so I might be a little biased when analyzing how the bill will effect small businesses. In the end, it is up to economic s to decide how it will all turn out. And economics is often counter intuitive to say the least.