Question 1
The Affordable Health Care Act has helped small businesses in various ways. For example, the act has led to low un-insurance rates among small businesses. Small businesses could not sponsor the insurance of workers before the implementation of the act due to high insurance costs. The subsidies, market regulations, and marketplaces that the act offers have substantially reduced the cost of insurance for small businesses. The uninsured rate for small business reduced from 40 per cent in 2013 to 19.4 per cent in 2016 (Chase & Arensmeyer, 2018). The act’s eligibility that expanded Medicaid coverage has also enabled small business workers to access health insurance. The number of small business workers covered by Medicaid increased by 50 per cent between 2013 and 2016 (Chase & Arensmeyer, 2018).
The changes that can be made to the act include adding provisions to prevent insurance firms from charging high premiums for individuals with preexisting conditions, and changing the individual mandate that compels small businesses to offer pay penalties or healthcare.
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Question 2
The two common strategies that small businesses can use to exit the market include selling or liquidating the business (Hogan Jr, 2009). The business can be sold if the owner is retiring early and lack an heir to continue business operations, the business partners dissolve their partnership, a co-owner becomes incapacitated or dies, the owner requires urgent cash, the owner lacks adequate working capital, or the firm requires new resources, strategies, or skills that the owner is unable to offer (FDIC, n.d.). The business can be sold to relatives, another business, a co-owner, key workers, other employees, or to another person.
Small business owners can also liquidate the business, particularly if the business has solvency problems (Hogan Jr, 2009). Liquidation is easy and quick and enables the owner to avoid investing extra capital before exiting (FDIC, n.d.). Liquidation also involves abiding by the required procedures, such as clearing debts, asset selling, and handling financial and legal issues (FDIC, n.d.).
References
Chase, D., & Arensmeyer, J. (2018). The Affordable Care Act’s Impact on small business. The Commonwealth Fund . Retrieved December 4, 2018, from https://www.commonwealthfund.org/publications/issue-briefs/2018/oct/affordable-care- act-impact-small-business
FDIC. (n.d.). 3-11 Small Business Exit Strategy - FDIC: Federal Deposit Insurance Corporation. Retrieved December 4, 2018, from https://www.fdic.gov/about/diversity/sbrp/311.pdf
Hogan Jr, D. R. (2009). $$$ the Entrepreneur Manager: The Business Man's Business Plan . AuthorHouse.
