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Will mandating that some companies provide health benefits lead to higher unemployment?

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  • Contributor
  • January 21, 2013

Q. I’ve heard that Obamacare is going to be a disaster for the economy, because anyone with more than 50 workers will have to buy insurance.  Small companies are the engine of job growth.  Won’t this lead to higher unemployment?

A. No. The law exempts all firms that have fewer than 50 employees, and 96 percent of the nation’s 6 million small firms fall below the 50-employee threshold.

Only a small fraction (200,000 ) of small companies  have more than 50 employees and most of those already offer insurance. But reforms’ critics have done an excellent job of spreading misinformation.

As a result, a recent  survey of 439 small businesses revealed that one-third incorrectly believed that they would be required to offer health insurance in 2014, and 35 percent weren’t sure. In fact, only two of the 439 would be expected to offer health benefits.

Read more FAQs about issues related to group health insurance and health reform.