Health Care Law Forces Businesses to Consider Growth’s Costs

– Stacy Cowley, newyorktimes.com, reprinted in the Eugene Register Guard

When LaRonda Hunter opened a Fantastic Sams hair salon 10 years ago in Saginaw, Tex., a suburb of Fort Worth, she envisioned it as the first of what would eventually be a small regional collection of salons. As her sales grew, so did her business, which now encompases four locations — but her plans for a fifth salon are frozen, perhaps permanently.

Starting in January, the Affordable Care Act requires businesses with 50 or more full-time-equivalent employees to offer workers health insurance or face penalties that can exceed $2,000 per employee. Ms. Hunter, who has 45 employees, is determined not to cross that threshold. Paying for health insurance would wipe out her company’s profit and the five-figure salary she pays herself from it, she said…

We Respond & Your Comments

Here’s a thought that seldom occurs to government wizards: When you give people an incentive not to do something, they’re likely not to do it.

In the case above our Washington brainiacs wanted to incent employers to give employees health insurance by stuffing a $2,000 per employee fine down their throats if they refused. Instead the law incented them to avoid hiring 50 employees because doing so would cost them more than the fine! Brilliant!

Whenever our “public servants” in Salem or Washington come out with a new law or regulation we ask ourselves “What does it incent people to do or not to do?” We wish they’d ask themselves before voting on it.

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