Obamacare May Cost Small Business ‘Whiners’ 65% of Annual Profits


Today the NY Times has a case study on the cost of Obamacare to one small business. The business in question is Baked in the Sun, a California baker with 95 employees.

Baked in the Sun does about $8 million in annual revenue, however margins for bakers are tight so their annual profit is only about $200,000. Because the business has over 50 employees, they will be required to offer health insurance to their employees or pay a fine for not doing so.

The owners estimate that the cost of compliance would be $108,000 per year plus $10,000 in overhead to manage the plan. The cost of paying the fine for not offering insurance would be $130,000. So they have a choice between losing 64% or 65% of their annual profits.

The article goes on to note that not all employees will take the insurance being offered. Some will already have it through another individual–a spouse or parent. So the actual cost of offering a plan will likely be less than the potential cost. Of course, no one knows what the plans themselves will cost yet so it’s all a guess at this point.



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