Skip to comments.Small Businesses Cutting Jobs, Hours to Save Themselves From ObamaCare
Posted on 06/23/2013 6:13:39 AM PDT by rickmichaels
ObamaCare, Americans were assured, would create millions of jobs and be a boon to small businesses. But according to a recent survey, as full implementation of the healthcare law rapidly approaches, small-business owners, rather than rejoicing at their good fortune, are slashing jobs, work hours, and expansion plans.
The Gallup poll, commissioned by the law firm Littler Mendelson, found that because of ObamaCare, 41 percent of small businesses have instituted a hiring freeze, 19 percent have shrunk their workforces, and 18 percent have reduced the hours of employees to part-time. Nearly four in 10 small businesses 38 percent told pollsters they have pulled back on their plans to grow their business in anticipation of the laws implementation.
We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didnt realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized, Littler Mendelson attorney Steven Friedman told CNBC.
To think that [nearly] 20 percent of small businesses have already reduced the numbers they have in their business because theyre concerned about the medical coverage is significant, and a bit troubling, he said.
These businesses, however, have good reason to take such measures. ObamaCares employer mandate requires businesses with 50 or more full-time employees either to offer affordable health insurance to their full-timers or to pay a $2,000 fine for each employee obtaining subsidized insurance on an exchange. Whats more, the law defines a full-time employee as one who works at least 30 hours per week on average. Employers thus have a strong incentive to keep their head counts below 50 and their employees weekly work hours under 30 something that major restaurant and theater chains and some state and local governments have already begun to do. And since expanding a business entails hiring new employees, which in turn could trigger the employer mandate, owners now have a disincentive to grow their businesses, retarding economic growth and forestalling job opportunities.
This may explain why even though the economy has been adding jobs in recent months, nearly half those jobs have been part-time, and the average work week has been shrinking. Forced to choose between subjecting themselves to the employer mandate which means either increasingly expensive health insurance or hefty fines and staying in business, employers are quite rationally opting for the latter.
It doesnt help matters that the one piece of ObamaCare that was specifically designed to help small businesses afford coverage an insurance exchange of their own has been delayed a year.
Lots of small businesses struggle with providing insurance for their workers so this was supposed to facilitate it and make it easier for small business to do this, Jim Capretta of the Ethics and Public Policy Center told Fox News. It was a huge portion of the sale job. When they passed the law in 2010 there were many senators and members of Congress who were saying I am doing this because its going to help small businesses.
Between this and the manifold uncertainties surrounding ObamaCares ever-changing rules and regulations requirements of the health care law are now the biggest concern for small businesses, the U.S. Chamber of Commerce found in its first-quarter survey its no wonder that small employers have a highly negative view of the law. Gallup found that 48 percent of small-business owners think the law will hurt them, while just nine percent think it will help them. (Another 39 percent expected no impact.) Fifty-five percent of owners believe the law will make healthcare more costly, while a mere five percent think it will cut costs. And 52 percent think ObamaCare will reduce the quality of care, as opposed to 13 percent who expect an improvement.
I cant say that the fears appear overstated, because the potential for big problems seems rather large, Friedman told CNBC, echoing the concerns of Sen. Max Baucus (D-Mont.), who warned that implementation of ObamaCare could be a huge train wreck.
We dont know until 2014 and beyond what the impact of the ACA will be on businesses, added Friedman, whose firm recently formed a healthcare-reform consulting group. There is tremendous fear that the premiums will be much higher, for small businesses especially. At this point we cant look a client straight in the eye and say, Dont worry about it. Everything will be fine.
Indeed, all indications are that everything wont be fine. Besides the delay of the small-business exchange, the state exchanges are behind schedule and over budget, and another ObamaCare program, the Basic Health Plan, has also been pushed back a year. According to the American Action Forum, the Obama administration has missed 29 of the ACAs regulatory deadlines, adding to the uncertainty surrounding the law; and those rules it has managed to issue have vastly increased the paperwork and financial burdens on businesses. Then there are the new taxes, some of which have already cost jobs, and the steeply rising health-insurance premiums. Only the uninformed (and Democrat loyalists) would claim that everything with ObamaCare is going swimmingly.
Of course, there are those who argue that the problem is not that the laws implementation is going badly but that the public simply needs to be educated about its vast (alleged) benefits. One such group, the Small Business Majority, said the findings reflect misconceptions about [ObamaCares] true effects as well as the need for continued outreach by reform advocates to the small business community, writes CNBC.
This is also the Obama administrations tack. The problem, as far as the administration is concerned, lies not in the law itself but in its advocates public-relations campaigns.
Yet the more facts as opposed to administration spin Americans learn about the law, the less attractive it becomes. And as this latest poll shows, small-business owners, whose very livelihood is threatened by ObamaCare, may be the most aware of its impending terrible consequences.
Whoda thunk business would anticipate and react?
Talk about unintended consequences..............................
which brings up the question:
was the provision about 30 hours put in obamacare to reduce our nation’s productivity?
There... fixed it
You think? Maybe the corporate globalists are just fine with a situation where small businesses can't grow.
I’ve been wondering, does the offering of “affordable” insurance include offering coverage for their children?
If so, this will mess up a lot of people who qualify for Medicaid or a higher up subsidized state plan for their children, but don’t if they have a chance to get it elsewhere.
Many many families are going to get caught in this trap.
Bureaucrats an politicians know nothing about business. That has been clear since they instituted affirmative action. The number one cause of blacks being denied entry level opportunity in a wide range of trades and fields...But at lest they vote Democrat!
My daughter is a nursing student. She told me that due to Obamacare, many hospitals are forcing per-diem nurses into staff nursing positions. Per-diem nurses receive much higher pay because they do not have benefits. Now the hospitals MUST provide insurance and are therefore eliminating per-diem and consequently cutting their pay substantially. I wonder how many of those nurses voted for the Marxofascist?
Amid sporadic news of employers cutting workers' hours apparently to avoid Affordable Care Act requirements, two U.S. senators want to amend the law to redefine full-time as 40 hours per week.
All but small employers have to offer affordable insurance to employees working more than 30 hours per week or otherwise face a $2,000 fine creating what Senator Susan Collins called a perverse incentive for businesses to cut their employees' hours so they are no longer considered 'full time.'
Collins, a Maine Republican, is joining Indiana Democrat Joe Donnelly in sponsoring the Forty Hours is Full Time Act, which would redefine the ACAs weekly full-time classification to 40 hours per week and raise the number of hours counted toward full-time equivalency to 174 hours per month. Excerpt, read more here.
Great, now America can be like Europe.
I don’t think the number of hours was actually in the bill. The bill left it up to the “Commissioner” to decide how many hours would be considered fulltime.
They could have easily predicted this is they had looked at the example of Hawaii, which had/has an employer mandate to purchase health insurance for employees working over 20 yours. The result: Lots of part time jobs with no employer paid health insurance.
To be fair, it’s not just ObamaCare. The burden of all kinds of employee regulations plus the demands of keeping up with making sure your employees are productive makes the decision to go with fewer employees a no-brainer for small business. In a really small business (say 20 or less people) many employers have found that they are working harder and longer hours, with more stress ... but not making any more money than when they were smaller (say 10-15 employees). There is a “dead profit zone” that is hard to overcome. So for many it makes no logical sense to expand.
There seems to be a break-out zone at somewhere around 30-35 employees when you can afford a full time compliance and HR person to handle all the paperwork, and managers to oversee productivity where it starts to make profitable sense to be larger. But Obmacare is going to push that zone upwards, which will make it harder for small businesses to grow incrementally because they’d have to jump over a larger “dead profit zone” at huge risk all at once.
All to bring us to third worldism and in line with all other third world nations, it’s called fairness. Our potential is being purposely removed and replaced by dependency, our foundations are being infected with rot, our political arena compromised, criminals of all kinds are controlling the ship of fools guiding it slowly into the rocks. Everything they do is calculated and planned with and end result in mind and this end result does not include us or our children.
Its “JUST” Starting!
So instead of fixing the problem they just change the hours so employees can work longer and still not qualify for benefits.
I guess that’s someone’s idea of a fix.
The deflection, if our side had any balls at all, should be easy. Unfortunately, I don't have much faith in our ability to communicate a coherent message that will resonate with people and make them understand what is taking place.
I don’t have much faith in our ability to communicate a coherent message that will resonate with people and make them understand what is taking place.
Let’s put it this way. We haven’t
been able to communicate anything to them so far.
Here’s another idea:
NEVER HIRE ANOTHER DEMOCRAT
Th unintended consequences were intended by Obama and Co.
Single payer looms ever closer. But that’s good. Then everybody can have a full time 40 hrs/week job.
The crony-capitalists of the big-government/big-corporate criminal complex don't like competition.
They don't want a bigger pie. They just want the whole pie.
The consequences were completely intended.
Force people to work 2 or more part time jobs - every part time job counts just as much as full-time job when they publish the numbers.
Get as many employers as possible to drop their health insurance, forcing people to turn to the government for their health insurance, and health care.
The final consequence being a single payer system, just like in England.
Interesting note: at my job, 2 of the new hires’ cars caught my attn.
1 had a NOBAMA sticker on it, the other had a PRO-LIFE lic. plate.
They are repeatedly surprised when their intellectual superiors in the private sector act to preserve their own best interests.
Life imitates art.