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WASHINGTON — In a 5-4 decision, the United States Supreme Court this morning upheld the legality of the Patients Protection and Affordable Care Act, also known as Obamacare.The court sustained the heart of the new law, the individual mandate. It stated that the Constitution's commerce clause would not support requiring people to buy a product or service, but that the government has the authority to tax to reach the social objective of providing health care.
The White House stated two hours later that now small businesses that want to provide affordable insurance for their owners and their employees will receive tax credits to make coverage more affordable. President Obama also stressed that those who can afford health insurance but choose not to purchase it will no longer receive free care through taxpayer subsidies.
A spokesperson for the Atlanta-based Asian American Hotel Owners Association, whose members represent nearly half of the hotel owners in America, declared: "While we respect the Court's authority to rule on such matters, we are disappointed in the decision. The employer mandates found in the law will increase costs to employers and employees alike. We will continue to support a repeal of employer mandates, to be replaced by a free-market solution to lowering costs of both healthcare and healthcare coverage."
It's not just hotel franchisees who are unhappy.
Keith Miller, chairman of the Coalition of Franchisee Associations, which is located on K Street in Washington, D.C., stresses that it is obviously a tough legal call, as shown by the 5-4 vote. "My concern is that the bill will hurt franchisees," he says. Miller, who owns three Subway franchises outside of Sacramento, points out that most franchise owners do not have 50 full-time equivalent employees, so they will not be mandated to offer health care to employees. "But I fear the indirect impact of the law," he stresses. "If the Wal-Marts, Targets, and large multi-unit McDonalds franchise owners are all required to provide health care to their employees, and my small sandwich shop is not, my business will be at a disadvantage in hiring candidates from the labor pool. I will find myself needing to provide health care or to raise my wages in order to compete in attracting appropriate employees."
Miller points out that another concern is that he has little confidence in the estimated government budget to fund this program. He thinks health care will be underfunded and that the government will need to either raise rates or broaden its base to collect more taxes, which would bring more franchise owners under the plan. "Now a business of 50 full-time equivalent employees is mandated to buy health insurance. What's to keep the government mandate from becoming 30 employees or even just 1 employee in the future?" wonders Miller. "It's not the Supreme Court decision I would argue, but a poorly written law that in the end will keep franchisees from expanding and creating more jobs in their local communities."
Asked whether or not his organization supported the new federal health care law, Jim Coen, president of the Massachusetts-based Dunkin' Donuts Independent Franchisee Association, replied, "Are government mandates for business owners ever supported by business owners?" Coen points out that the act is now law and that franchise owners should prepare for a 2014 implementation date of the employer mandate as well as the individual mandate and all other aspects of the law.
The Coalition has posted health care law FAQs (pdf) for the benefit of franchise owners.
"While it may have been ruled constitutional, the law is unworkable, unaffordable and wrong for our country's small business owners who continue to struggle in a still sluggish economic climate," declares Steve Caldeira, CEO of the International Franchise Association, a group of some 1,300 paid franchisor members. "By upholding the law, 3.2 million jobs at franchise businesses continue to be put at risk due to the employer mandate provision, thereby discouraging and disincentivizing the creation of new jobs and business expansion."
The National Federation of Independent Business (NFIB), which spent funds to take the issue up with the Supreme Court, lost their case. "This day will go down in history as the day when Americans lost a part of their freedom – the freedom to choose what they want to buy with their own money," said Karen Harned, executive director of NFIB's Small Business Legal Center.
"I will act to repeal Obamacare," responded presumed GOP Presidential nominee Mitt Romney a few minutes after the Supreme Court verdict was made public. Romney, who hopes to be elected President of the United States in November, objects to the federal government mandating such a health care plan to states.
Massachusetts was the state that first designed and introduced universal health care through then-governor Mitt Romney. That state model was largely used for the federal Patients Protection and Affordable Care Act that President Barack Obama has been pushing.
Read the June 28 decision from the Supreme Court — National Federation of Independent Business v Sebelius (pdf)