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THE BUSINESS OWNER

Q: Which businesses will be required to offer health care to their employees?

A: Employers with more than 200 employees will be required to automatically enroll employees into health plans that the company offers, although employees can opt out of coverage.

Employers with 50 to 200 employees will be required to offer insurance, but companies that employ fewer than 50 will not. Their employees, however, will be required to get insurance on their own, most likely through the new state-run purchasing exchanges, starting in 2014.

Q: What will happen to companies that refuse to offer health care?

A: Companies that employ more than 50 people but do not offer health insurance will be charged a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. That fee applies to companies that have at least one full-time employee who receives a tax credit to help pay for health care.

Q: Will any penalties apply to firms that offer insurance?

A: Yes. Employers with more than 50 employees that offer coverage -- but have at least one full-time employee receiving a premium tax credit -- will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee.

Q: When do all these employer mandates start?

A: Jan. 1, 2014.

Q: What kind of aid will be available for small businesses to help them provide health care?

A: Small employers with no more than 25 employees that offer average annual wages of less than $50,000 and that offer insurance to their employees will receive a tax credit.

Between 2010 through 2013, such employers will receive a tax credit of up to 35 percent of the employer's contribution toward the employee's health insurance premium -- so long as the employer pays at least half the cost of the employee's health care.

Employers with 10 or fewer employees and annual wages of less than $25,000 will receive the full 35 percent tax credit, but the credit phases out as companies get bigger and pay their employees more.

After 2014, things change thanks to the creation of state-based purchasing exchanges. At that point, businesses that buy policies through an exchange will get a tax credit of up to 50 percent of their contribution toward each employee's insurance premium -- so long as the employer pays at least half the total premium cost. Companies with 10 or fewer employees and average annual wages of less than $25,000 will be eligible for the full 50 percent credit, but the credit phases out for bigger companies that pay more.

Q: Will the law force businesses to cut jobs?

A: Opinions differ on this.

The law "will further expand entitlements and explode the deficit, and raise taxes by a half a trillion dollars at the worst possible time," said Thomas J. Donohue, president of the U.S. Chamber of Commerce. "American jobs and growth are at risk."

Small businesses with just over 50 employees are especially likely to cut jobs, some experts say, because they can escape penalties for not offering insurance simply by scaling back to less than 50 employees.

But reform advocates say that the double-digit increases in health care costs in recent years have been depressing wages and killing jobs already. They say that if the law slows the rate of increase in health care costs, that will free businesses to pay more money for higher salaries and more employees.

"Health care reform really is a job creator -- and it helps businesses and employees keep jobs," said Sen. Max Baucus, chairman of the Senate Finance Committee.

Q: Large businesses seem to be more comfortable with the law than small businesses. Why?

A: Because larger companies already tend to offer health insurance to their employees and will be very happy if the law slows the rate of health care inflation. But for smaller companies -- especially those with 50 to 200 employees -- there's no question that the law is a new, if somewhat subsidized, burden.

Q: Are there businesses that will be especially affected?

A: Yes. The law targets companies that some see as instrumental in making Americans less healthy. Starting this year, there will be a 10 percent tax on indoor tanning services. And starting in 2011, chain restaurants and vending machines will have to disclose the nutritional content of each item they sell.

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>"I'm going to have to make a decision ... I cannot grow through this."

Kevin Lipomi's company employs 55 people on Buffalo's East Side, and he worries that the health care law is, for him, a good reason to trim his work force.

The reason is simple: Companies that employ more than 50, under the law, must pay a government penalty if they don't offer their employees health insurance. Companies that employ fewer than 50 won't have to pay any penalty.

And that hard fact leaves Apple Imprints, which for 29 years has printed T-shirts and other souvenirs, facing life-or-death dilemmas.

Of course, the company could offer health care to its employees, which is what the government wants. But his company can't afford that.

"It's a very competitive field," Lipomi said. "If we offered health care to our employees, we would be out of business.

"I'm going to have to make a decision: to scale back or to break the company in two," he said. "I cannot grow through this."

Lipomi's dilemma is not an uncommon one for companies with between 50 and 200 employees, the businesses that will feel the biggest pinch under health reform.

There's a wealth of tax credits and subsidies available both to employers and employees under the plan, but to Lipomi and many other small businesses, they just don't make up for the added cost of doing business that the government just created.

"On a grander scale, it sounds like a good idea to add 32 million people to the insurance rolls," he said. "But in my mind, I'm looking at it on a personal level. I'm even very concerned that if we add these 32 million people to this system, will our own personal health care be watered down?"

-- Jerry Zremski

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