I own a small business. I have employees. I pay my employees above average wages because I want them to stay with me and it actually costs me less to not have to retrain someone every 12 months. I am not at the limit yet, but were I to reach the employee limit that requires me to begin paying the extra premium I am now left with 4 options because I now have a huge expense added into my operating budget.
1. I raise my prices to compensate. I now charge $150 for a service I provided last year for $120. Customer A looks at my price and at my competition who is under the employee limit and didn't have to raise his prices. My customer goes with my competitor because they are tight on funds and can't afford to pay more. I lose money. Since I can't lose money and stay in business I am now forced to.
2. Reduce my work force to below the required number of full time employees or
3. Reduce my full time employees to part time hours only or
4. Realize that there is no way I can operate and close the doors for good laying off all my employees.
These are my options as I see them.
What I now can't do is grow my business because I am in effect penalized for being successful. I now have a very real ceiling where before I could grow as big as I could dream.
Now let's say I close the doors. The cost to insure my former employees now falls to someone else. ALSO any revenue the government would have received from income taxes is now gone.
50 people who were working and contributing are now unemployed and are facing the task of trying to find another full time job, while draining resources via unemployment.
To sum up how it's bad for me, it seriously affects my ability to grow my business and employ a work force.