NCPA - National Center for Policy Analysis

Small Business Owners Fear the Affordable Care Act

June 27, 2013

Small business owners' fear of the effect of the new health care reform law on their bottom line is prompting many to hold off on hiring and even to shed jobs in some cases, according to a recent poll, says CNBC News.

  • The poll was taken by 603 owners whose businesses have under $20 million in annual sales.
  • Forty-one percent of the businesses surveyed have frozen hiring because of the health care law known as ObamaCare.
  • Almost one-fifth (19 percent) answered "yes" when asked if they had "reduced the number of employees you have in your business as a specific result of the Affordable Care Act."
  • Another 38 percent of the small business owners said they "have pulled back on their plans to grow their business" because of ObamaCare.

Under ObamaCare, nearly all companies with 50 or more full-time employees will have to either offer health coverage or face a fine of $2,000 per full-timer after the first 30 workers. Just 9 percent of the small employers surveyed agreed that ObamaCare would be "good for your business," while another 39 percent saw "no impact."

The prevalent pessimism tracks other answers in the poll, which showed that:

  • Fifty-five percent of small business owners believe that the health reform law will lead to higher health care costs. By contrast, about 5 percent said the law would lead to lower costs.
  • And more than half (52 percent) said they expected a reduction in the quality of health care under ObamaCare, while just 13 percent expected an improvement.

In addition to restricting hiring or cutting jobs, small companies are considering other ways to mitigate the expected financial fallout. Twenty-four percent are weighing whether to drop insurance coverage, while 18 percent have "reduced the hours of employees to part-time" in anticipation of ObamaCare's effects, the poll found.

Source: Dan Mangan, "Will Obamacare Hurt Jobs? It's Already Happening, Poll Finds," CNBC News, June 19, 2013.


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