How Will the Patient Protection and Affordable Care Act Affect Small, Medium, and Large Businesses?

Few debates are more fever-pitched than the one about government spending and the economy. In the past year, a significant amount of this debate has centered on the Patient Protection and Affordable Care Act (PPACA), with many saying that it will lower the federal budget deficit over the long-term, and others contending that it will inflate the deficit and national debt.

In a report funded by the Robert Wood Johnson Foundation, Urban Institute researcher Linda Blumberg looks at how business—small, medium and large—will be affected by the PPACA. According to Blumberg, it will affect employers differently, depending upon their size and whether they currently offer health insurance. Small employers—those with fewer than 50 workers—will face no new requirements, but will have new insurance options made available to them through the new health insurance exchanges. Medium-size employers—those with 50 to 100 workers—will have access to these new coverage options as well, but may face some financial penalties if their modest income, full-time workers obtain federal subsidies due to a lack of affordable coverage available through the workplace. The vast majority of large employers—those with more than 100 workers—currently offer insurance coverage to their workers and, as a consequence, are the least likely to be significantly affected.