Sept. 24, 2010 -- Small business owner Marty Grunder has seen his health insurance costs jump up by 28 percent over the last year.
Grunder says his annual cost has jumped from about $110,000 to $140,000, even though he downgraded the plans and asked his employees to contribute.
"I'm worried because I don't know what's coming," he said.
The Ohio businessman is frustrated by the new health care law, which he feels is putting more constraints on his landscaping company, which has 20 full-time employees.
"During these times when entrepreneurs are so scared and they're adverse to risk right now, which is not good for anyone, you throw another body blow like that and it doesn't do good mentally," he said. "They're afraid to put money back into their business because they're wondering what else is coming."
Most importantly, Grunder, who is also a professional speaker, says he has no idea what the new health care law really means for his company.
"I don't understand what the law even says. It's so complicated," said Grunder, who is a registered Republican. "I have to hire a consultant to even figure it out."
Grunder is one of many Americans and small business owners who are still unclear about what the changes mean for them, as demonstrated in an Associated Press poll released Tuesday.
The Obama administration has stepped up its awareness campaign, but on Wednesday, President Obama acknowledged that more could have been done.
"Sometimes I fault myself for not being able to make the case more clearly to the country," the president said at a backyard event in Virginia marking the six-month anniversary of the health care bill.
Betsy Burton, a bookstore owner in Salt Lake City, Utah who attended the event, blames the lack of support for the health care law on misinformation. Burton, who was present at the event, says she has already seen benefits of the health care law and is excited about the new changes that will be rolled out in the next few years.
"If people look at all the ways that they (the government) have tried to help small businesses in this bill -- it's not going to cost small businesses money, in fact it can help them enormously," said Burton, a Democrat. "Something had to change. Health care was destroying small businesses. Just the fact that they've created a system, even if it's not pefect, means there's a system we can build on."
Here are the provisions aimed specifically at small businesses and what they mean:
Health Care Law's Impact on Small Businesses
Tax Credit: Businesses with fewer than ten employees whose average annual wage is less than $25,000 are eligible for a tax credit that covers up to 35 percent of the premiums a small business pays. The credit is available for the 2010 tax year for both for-profit and non-profit organizations.
Even though businesses won't actually see the payoff until 2011, when they file their tax return, business owners like Burton say it helps them budget for the future.
The administration estimates that up to 4 million small businesses could qualify for the tax credit this year, totaling about $40 billion in relief.
The tax credit rate increases to 50 percent by 2014, and will be available for two years.
The credit decreases as the size and average wage of the company increases. For example, other small businesses, classified as companies with 25 employees or less whose average annual wage is less than $50,000, are also eligible, but a smaller portion of their costs will be covered. That percentage is determined on a sliding scale basis.
Insurance Exchanges: By 2014, the administration will set up American Health Benefit Exchanges, a marketplace where businesses with 100 employees or less, and individuals, can shop for coverage. The exchange will be designed as a place where people can compare various insurance policies and options.
States will have to offer the Small Business Health Options Program where small businesses will be able to buy insurance together in pools.
By 2017, businesses with more than 100 employees will be able to purchase coverage in the SHOP Exchange.
Exemption From Penalties: By 2014, all businesses will be required to provide health insurance to their employees, and will face penalties if they don't. But employers with 50 or fewer employees will be exempt from the penalties.
1099 Mandate: Under the Internal Revenue Service 1099 reporting requirement, businesses will have to identify any person or any entity to whom they have paid $600 or more for goods or merchandise in a year. The federal government will have authority to tax those transactions.
"The concern is not so much that small businesses will have to pay more but instead that it will be a reporting requirement nightmare, that the paperwork burden of having to file all of these new forms will be extensively burdensome to businesses," said Jennifer Tolbert, health policy analyst at Kaiser Family Foundation.