During my time as governor, we worked hard to create a favorable business environment in South Dakota. We kept taxes low, regulations in check, and added 28,000 new jobs – despite the country reeling from the deepest recession since the Great Depression. Working together, we’ve created one of the strongest economies in the nation. The key to economic growth is job creation and a healthy economy. Washington D.C. just doesn’t get it – you can’t tax and spend your way to economic prosperity! Speaking of taxes, let’s discuss the excise taxes on employers under Obamacare!
As a small business owner, I am concerned the good work we’ve done in South Dakota is at risk because of Obamacare and the bad decisions by the Obama Democrats – led by Harry Reid.
Under Obamacare, businesses with 50 or more full time or full-time equivalent employees are subject to a $2,000 per employee excise tax per year on all employees above the 30th one for not offering a federally approved health insurance package. The Obamacare employer mandate kicks in for businesses with 100 or more employees in 2015, and for businesses with 50 to 99 full time employers in 2016.
As a small business owner, offering health insurance is something my partners and I have always done. It’s a great benefit for our team members. But, there are big problems, and severe consequences with the government’s mandate.
First tourism and other seasonal employers will be faced with a significant cost increase – because the mandate is not flexible enough to fairly address the fluctuating employee head counts or work schedules. A friend of ours from Rapid City recently told me that the employer mandate would increase the cost of healthcare for his business by hundreds of thousands of dollars. Any business with 100 employees who does not offer qualifying coverage will face an annual excise tax of $140,000 and that goes up each year with inflation! Even those employers who offer coverage may be forced to pay an excise tax because their premium costs are not affordable for employees.
Second, as businesses are trying to make decisions on how the mandate will impact their bottom line – they’re also forced to consider the labor market and whether or not they can even afford employees who work more than 30 hours per week. Health insurance premiums are rising under Obamacare. Unfortunately, businesses from around the country – because they simply won’t be able to afford the cost increase – will likely be forced to reduce the workforce or replace some functions with automation or out sourcing. This will not make our economy healthier or our taxpayers fully employed like they deserve!