Affordable Care Act - Essay Example

The implementation of the act has therefore been postponed.
1. Background. President Obama signed into law the Affordable Care Act and Protection of Patients into law on the 23rd of March 2010 (Tammy, 2013). The act intends to offer all citizens of America a health insurance policy that can be easily affordable. This is in line with the main goal of achieving better health care in the United States. The employer is required to sign and implement the new act. This is supposed to affect companies with 50 or more staff members. The staff is supposed to be given health insurance. Failure to adhere to the new rules will see companies getting stiffer penalties. The act comes as a reprieve to the employees but serious issues still arise on the side of employers (Tammy, 2013). These challenges that have led to the delayed implementation of the act include:-
a. Tax liability. Taxes imposed are likely to impact negatively on the companies especially the small businesses. Marginal profit will be reduced.
b. Hiring. Costs involved in hiring new labor appear to be high according to employers. The business will prefer to have less than 50 employees to be exempted from the Affordable care Act.
2. Tax Liability. Employers with the threshold of 50 or more staff are legally required to give health coverage to their staff. Failure to adhere to this they are to pay tax penalty which will increase annually. Estimates indicate that in 2014, the penalty will amount to $47.50 per child and $95 per adult or 1 percent of the household income that is taxable. In 2015, the penalty will be $ 162.50 per child and $ 325 per adult or 2 percent of household income that is taxable. In 2016, the penalty will amount to $347.50 per child and $695per adult or 2.5 percent of household income that is taxable. In each case, whichever option is highest will be considered.

After 2016, there will be an increase annually in the penalty centered on the increase in living costs (Tammy, 2013). The penalties impact negatively on small businesses that might be forced to go through severe losses and even shutdown.
3. Hiring. Research indicates that there will be a loss of approximately two million people employed on a full-time basis in 2017 as compared to the number working in the nonexistence of the new law. Big and small companies are likely to reduce the rate of hiring, the small companies being the most affected. ACA can hasten the deterioration in employment in small businesses by reducing both the need for workers in small businesses to offer labor and the need of owners of small businesses to demand labor (Tammy, 2013). The employer in small businesses will prefer to have less than 50 staff.
4. Conclusion. Tax liability and cost of hiring new labor impacts of the ACA. Reduction in employment and the decline in businesses will lead to a staggering and decline in economic growth. Economic growth is vital in the United States. Consumers are important in the economic growth of the United States. When businesses decline, the rate of consumption also goes down. America's growth directly affects growth and poor nations.