This study examines the effect of Massachusetts health care reform on new, existing and total business.  As of April 12, 2006, firms with more than eleven employees were required to offer employer health insurance or pay a fine.  This mandate-based health care reform provides a natural experiment to measure whether new, existing, and total establishments and their employment were affected across size of business.  Using the Dun and Bradstreet data and a differences-in-differences methodology augmented by a border approach, we find the reform did distort incentives for new firms.  More specifically, we find a shorter term decrease of 1.5% of new businesses activity for firms with 11-24 employees in Massachusetts versus the adjacent border counterfactual area, followed by a longer term increase of 6.1% in businesses with 10 or less employees.  We find no evidence of impacts on the survival rate or employment in existing and total business. Overall, our findings suggest that new entrepreneurs are adversely affected but not enough to affect the overall business environment.