When Jody Hall opened Cupcake Royale, Seattle’s first cupcake bakery, in 2003, it was important to her to offer healthcare to her employees. Her terms were generous—she offers to pay for 75 percent of the healthcare costs of any employees who works over 28 hours—but after years of watching her annual premiums increase, she realized taking care of her workers wasn’t sustainable.
“I was coming from corporate America, and after starting my own business, I realized I was paying almost twice the amount for half the coverage,” Hall told TakePart. “I was blown away that small business owners were being hit so hard, and they didn’t even have access to the same quality healthcare.”
Today, the Supreme Court voted to offer small business owners like Hall some respite. This morning’s 5-4 decision, led by Chief Justice John Roberts, upheld the Affordable Care Act's highly contested individual mandate, ruling it constitutional as a tax. Kept in place were the bill’s introduction of state insurance exchanges, which allow independent businesses to band together to negotiate better healthcare at better rates, as well as the 80-20 rule, which requires insurers to devote no less than 80 percent of their cash to payouts.
The decision will affect small business owners in different ways depending on how many employees they have and whether they were already paying 100 percent of their workers’ premiums.
CNN reports that for companies with 50 or more full-time employees, the court’s decision means they’ll have to deliver healthcare for every worker by 2014, or be penalized.
For Hall, the decision means it will become more affordable for her to continue offering healthcare for her 72 workers. Before the Affordable Care Act, she was subject to annual rate hikes of 20 percent—in 2009 it climbed as high as 40 percent—and in 2011, she paid over $67,000 to cover her workers. But this year, Hill said her premium only went up five percent, an increase she called “unheard of.”
“Now that we still have access to the same exchange, I’m going to save a lot of money come 2014. Or, I’m going to pay the same amount of money and have healthcare that is equal to plans offered by Microsoft or Starbucks,” she said. “I’m excited, and my workers are excited.”
Providing healthcare for two out of four employees has been “very expensive” for Filis Winthrop, who has owned independent bookstore Chevalier’s Books in Los Angeles for 20 years.
“Once a month we pay a huge amount,” she said. “It’s big. I’m hoping this will bring costs down.” Winthrop added that even a small decrease would be helpful. “I know it doesn’t start until 2014, but I hope there will be some relief.”
Not all small business owners are as excited, however. Dan Danner, president of the National Federation of Independent Business, released a statement warning that “small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses.” His concern was echoed by Karen Kerrigan, president and CEO of Small Business & Entrepreneurship Council, who told The Washington Post that the decision “undercuts freedom” and would stifle economic growth.
But while the 50-employee mandate may translate into increased costs for employers in the short term, small businesses owners like Hall, who employs over 70 workers across five locations, show that it’s possible to make a profit while still taking care of her own.
“The majority of small businesses want this,” Hall said. “Why would we want to pay 20 to 30 percent increases every year on healthcare? This is something that’s really going to help Americans, small business owners, and the economy.”
Asked for her thoughts on who stands to benefit the most, Hall didn’t hesitate.
“I honestly think every individual in the U.S. will be benefiting from this,” she said. “I’m overwhelmed. This is such an important day.”
Are you in favor of the Supreme Court’s decision? Let us know in the COMMENTS.
Oliver Lee has been covering social justice and other issues for TakePart since 2009. Originally from Baltimore, he lives and writes on a quiet, tree-lined street in Brooklyn. Email Oliver | @oliverung