There are two takeaways from the case. First, the state’s mission is to use government as a redistribution mechanism for wealth. This is why factions, left, right, and center, battle for control of government every two years.
In the case of an entrepreneur, the government wants to ensure that part of the entrepreneur’s wealth (positive or negative) goes toward funding of benefits that the electorate has no fiscal stomach for funding itself, in this case access to health insurance and the benefits attached to it. The entrepreneur will either purchase a plan for her employees; pay a fine; or push the employees on to an alternative like Medicaid, if it is available. Under either scenario, the entrepreneur is forced to make a decision she otherwise would not have absent the government’s action.
The second takeaway is that for start-ups, how they organize their business must take into account the “political economy” promoted by the state at the time they form. In other words, what type of environment is the state promoting and how will it impact my ability to generate revenues and hopefully sooner than later earn a profit. In the case of the Affordable Care Act, more entrepreneurs may leverage innovative technology and outsourcing to get around hiring employees and paying exorbitant benefits packages. Why have a payroll when you can retain a mix of temporary workers and independent contractors.
I predict over the next decade more individuals, especially skilled or professional workers, will find themselves in the independent contractor ranks and purchasing benefits on their own. That will be a great day for ….#TheOpenCountry