Tag Archives: franchisors

Since the Affordable Care Act (ACA) was signed into law in March 2010, small business owners, particularly franchisors and multi-unit franchisees, have been wary of the effects of its implementation on their businesses. One major concern has been the economic effect of the so-called “Employer Mandate,” otherwise known as the “Pay or Play Mandate,” which requires all employers with 50 or more full-time employees to either offer a certain level of health care benefit coverage or pay non-deductible penalties. Typically, small business owners have less bargaining power than large companies and generally pay higher prices for insurance. Therefore, small business owners often decline to provide their employees with health benefit coverage. As of January 1, 2014, these companies may be subject to penalties under the ACA if they do not offer health coverage. In defense of the legislation, proponents of the ACA argued that small businesses would not be placed at a competitive disadvantage because they would have the option to purchase coverage through Small Business Health Options Program exchanges (SHOP exchanges). Unfortunately, on April 1, 2013, the Obama administration announced that due to “operational challenges,” the SHOP exchanges will not be fully operational in 2014, but may open in 2015.