Here’s a prediction. The implementation of the insurance exchanges and tax subsidies established under the Affordable Care Act will prompt many small businesses to discontinue offering health insurance directly to their employees.

But that won’t necessarily be a bad thing for workers or for the government, and it’s likely to provide small businesses that already offer health insurance significant savings over what they have been paying in the recent past.

I’m making that prediction based on personal experience, as well as research since the health exchanges went online a month ago.

At the Timberjay, we’ve long provided health insurance to our full-time employees. It’s become increasingly difficult in recent years, however, as the costs have escalated to unsustainable levels. For the most part, we’ve compensated by turning to higher and higher deductibles, a trend that most private sector employers and employees are very familiar with these days.

When the Minnesota health insurance exchange, known as MNsure, came online Oct. 1, I spent considerable time searching through insurance options. As a business, however, the only option available is a group plan, but every one of them was too expensive—nearly 50 percent higher than what we are currently paying to purchase individual policies for our employees.

Because we’re a very small business, we would qualify for a tax credit that could pay up to 50 percent of the cost of a group plan. Unfortunately, the tax credit is not refundable, which means you can only take advantage of the credit if your business shows a large enough profit to write down a significant federal income tax bill. Given the group plan rates I found at MNsure, we could expect to pay out about $27,000 annually to cover four full-time workers. That would generate a potential tax credit of about $13,000 a year. But in order to take full advantage of it, we’d need to be showing annual profits of close to $50,000 a year. We’ve never come close to a profit margin like that.

If you don’t show a profit at all (which is more likely following a 50 percent hike in insurance premiums), the tax credit provides no appreciable benefit.

The only other options that appear to be available to our business are to continue with our existing individual insurance policies, or discontinue offering health insurance, which would allow our employees to purchase individual policies through MNsure.

Continuing our current insurance really isn’t an option. The high deductible plans we had been purchasing for employees aren’t allowed anymore under the Affordable Care Act. Our current insurers have adjusted their plans to comply with the new law, but in doing so, the rates have jumped 40 percent.

Which brings us to the only viable option for many small businesses— discontinuing coverage. Individual rates available through MNsure are reasonably competitive, and once you calculate the subsidies available, they are downright cheap. A single, 55-year old, earning $32,000 a year, for example, would pay about $225 a month after subsidies are added in, and that’s for a silver level plan.

It would not be unusual for that same person to be paying two or even three times as much in the current health insurance market, for equivalent coverage, so it’s pretty clear that if people can eventually navigate the websites associated with the Affordable Care Act, they will find insurance options that really are affordable.

My conclusion comes after trying out numerous scenarios using the Kaiser Family Foundation’s subsidy calculator (which you can find at kff.org/interactive/subsidy-calculator).

Don’t bother looking at the MNsure website for an estimate of your potential subsidy. For reasons that I still don’t understand, the state website does not provide a subsidy calculator until users actually complete an application. I’ve tried numerous times to set up an individual account on MNsure, which would allow me to fill out an application, but I have yet to get anything other than an error message to date.

Using the Kaiser calculator and individual insurance rates which are accessible on the MNsure website, it appears that, after subsidies, individual plans for all of our employees would cost less than half as much as purchasing a group plan through the business (about $1,000/month for individual plans versus $2,200/month for a group plan).

That’s good for our business, and for our employees, because the savings we will achieve by not providing health insurance can translate into an increase in other types of compensation to employees, such as wages or higher mileage reimbursements, which would easily cover the full cost of their newly-subsidized individual policies. So employees who used to pay a portion of their health insurance premium, and got pretty poor coverage besides, will get a better policy and end up no worse off financially, and possibly money ahead. And it will still provide a substantial savings to the business.

These calculations might be different if a business had mostly young workers (which might mean lower group rates), but a business like ours, with a workforce dominated by baby boomers, could expect similar numbers.

If so, I would anticipate small businesses that currently offer some health insurance to stop doing so— in droves.

How this might affect the finances of the ACA is unclear. Some analysts have predicted that as small businesses drop coverage (for reasons I just indicated), the amount paid out in federal subsidies is likely to exceed initial projections and push the cost of the ACA to unsustainable levels.

That’s possible, but unlikely. Such analyses tend to overlook the fact that the federal government has subsidized employee health insurance for years, by considering it non-taxable compensation. That loophole in the tax code costs the federal government about $200 billion annually. If small businesses drop insurance, and make up for it through higher wages, (as would be expected) the higher tax receipts to the government should help offset the cost of subsidizing more of those workers.

If small businesses don’t boost employee pay, the savings will accrue to their bottom line, which should result in higher profits— and, again, more tax revenue to the government.

What’s more, these same small businesses would have otherwise qualified for tax credits included under the ACA. If those businesses now drop coverage, the government will lose less revenue to that tax credit. In effect, subsidies that would have gone to small businesses will go to individual workers instead. In the end, it’s likely to come out a wash.

There’s no doubt that the ACA will lead to some unexpected consequences, both good and bad, which is why Congress and future presidents will almost certainly make numerous adjustments to the law over time.

The good news is, the law, as currently written, has the potential to bring decent, affordable health insurance coverage to tens of millions of Americans who currently lack it. Now, if only the websites worked…