Small Business and ObamaCare (from WSJ)

[cred65]

A new survey shows that employers will drop coverage and cut hours.

One of President Obama's proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law "makes it easier for businesses to find better coverage options" and "stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable." Small businesses aren't buying it.

That's the finding of a Public Opinion Strategies survey of more than 400 business owners with between 40 and 500 employees conducted in September and October for the U.S. Chamber of Commerce and International Franchise Association. Some 64% of small business franchise owners (such as owners of fast food and retail stores) believe the law will have a "negative impact" on their business, while only 5% expect a "positive impact." For non-franchise businesses the ratio was 53% negative and 12% positive. Only one in 12 agree with the President that the health-care law will "help" their business.

Even more problematic is how businesses are already responding to the new law. The White House continues to deny any relationship between hiring and ObamaCare. The poll finds 27% of franchise businesses and 12% of non-franchises have already replaced full-time with part-time employees in anticipation of the law's employer mandate. ObamaCare defines a full-time employee as someone who works 30 hours or more a week.

The survey also reveals that the "49er" effect is very real. These are businesses that will cap their full-time payroll workforce at 49 employees to avoid ObamaCare's insurance mandate for companies with more than 50 full-time equivalent workers. Of firms with between 40 and 70 employees, a little over half say they are likely to "make personnel decisions to keep" their "workforce below the threshold of 50 full-time employees and avoid the requirements and penalties associated with the new health care law."

More than one in four businesses (28%) say that in 2015, when the employer mandate is scheduled to take full effect, it is "likely" they will drop their insurance coverage and pay the penalty of $2,000 a year per employee. These are the plans employers and employees were promised they would be able to keep.

Opinion surveys are often unreliable predictors of how people will act in the future, but these findings do at least expose the widespread anxiety that businesses are feeling about ObamaCare's new costs. If the economy and business conditions improve and customer demand rises, employers may swallow these costs to expand their operations. But in an economy with nearly 20 million Americans out of work, discouraged from even looking for work or forced into part-time jobs, ObamaCare is making the search for employment all the more challenging.

One fix that might mitigate some of these negative employment effects would be to pass a law proposed by Senators Joe Donnelly (D., Ind.) and Susan Collins (R., Maine) to change ObamaCare's definition of a full-time job to 40 from 30 hours a week. Better still would be for Congress to repeal the law and pass a business and worker-friendly health-care reform

[Mr. Pencil]

If the economy and business conditions improve and customer demand rises, employers may swallow these costs to expand their operations.

Yeah, yeah, we hear the same excuses about minimum wage. The FACT is in the line I isolated above--staffing at "fast food and retail stores" is based on revenue, not expenses. That kind of work doesn't take much lead time, so none of those companies are making any serious plans about 2015 yet. It's just the usual WSJ political rhetoric nonsense.

[MAMalody]

Yeah, yeah, we hear the same excuses about minimum wage. The FACT is in the line I isolated above--staffing at "fast food and retail stores" is based on revenue, not expenses. That kind of work doesn't take much lead time, so none of those companies are making any serious plans about 2015 yet. It's just the usual WSJ political rhetoric nonsense.

I am not sure that I would agree with your statement here. One of the few expenses the fast food and retail stores can control (to some extent) is payroll. When I was in that industry (for about 10 years) I was always looking forward to known increases in expenses to see how to adjust for them. I had to either absorb them or consider price increases to maintain my profit goals. Cliintonomics is not always an option.

[Gail in Virginia]

A couple of points I would like to bring out. First, I think this post probably should be in the political section. Second, employers have been skittish about hiring and paying a decent wage for quite some time now even without Obamacare. Stocks are at record highs, CEO's are earning record salaries, and yet employment is not reflecting the improvement to the economy at nearly the same rate. The last statistic I saw about the difference between what CEO's and the lowest paid employee of a firm earn now as compared to 40 years ago really emphasize that. Finally, there is so much dis-information available about the entire healthcare plan that the results of a poll like this are not surprising. If there were not, things like the Jimmy Kimmel street poll where people approve of the affordable care act but are worried about obamacare would not be the norm.

[Guest Taxed]

I also worked in the fast food industry in my younger days and I can tell you from experience that payroll (work hours) is directly tied to revenues. For example on slow days we were sent home early. When the store was losing revenues because a competitor opened up a mile down the street, payroll was cut (I got a nice pink slip).

So while as a manager you are suppose manage your expenses, payroll included. Mr. Pencil is right that staffing is directly revenue based. I mean think about it logically?

[ILLMAS]

Can't the small business owner simply pass the health care burden on the employees, he/she washes their hands and let them deal with it? I have a suspicion many small business are going to take that route especially if they fall under ACA requirement, I already heard someone thanking Pres. Obama in a colorful language after their employer dropped their health care plan. It's not illegal but morally wrong yes?

[Guest Taxed]

>>>> Can't the small business owner simply pass the health care burden on the employees, he/she washes their hands and let them deal with it?

We have a screwed up system in this country that after 50 years we are still struggling whereas the rest of the developed countries have already figured out. May be in another 50 years we will have figured out how to solve this problem.

[MAMalody]

>>>> Can't the small business owner simply pass the health care burden on the employees, he/she washes their hands and let them deal with it?

We have a screwed up system in this country that after 50 years we are still struggling whereas the rest of the developed countries have already figured out. May be in another 50 years we will have figured out how to solve this problem.

It is interesting to note that of the 34 countries that "have figured out" uiversal health care, only 9 have an insurance mandate. Looks like even those "advanced" countries that have it all figured out, have figured out that an insurance mandate is not the best way to go.

[Guest Taxed]

Eventually we will end up in an expanded medicare type single payer system. Govt. has to figure out how to convert the employer premiums that they pay for employees into a tax, the employee portion into a tax and have a composite formula to convert all that into a tax that is applied to all individuals and businesses, just like the medicare tax we pay now.

[taxxcpa]

If the government controls the insurance companies and the insurance companies control the doctors, who is going to control the government?

Will the government's next step be to cut out the middle man and assume direct control of the doctors--and make all doctors government employees. Maybe set up an academy for future doctors like the ones for military officers.

[Guest Taxed]

That is the UK model for their Natl. Health Service.

Then there is the Swiss, German, Canadian model where insurance companies are NOT owned by the Govt. and docs. are not Govt. employees.

[Jack from Ohio]

That is the UK model for their Natl. Health Service.

Then there is the Swiss, German, Canadian model where insurance companies are NOT owned by the Govt. and docs. are not Govt. employees.

We are NOT Switzerland, German or Canada.

If their system is so great, moving there is an option available to every American. Liberals especially.

It you wish to become a sheeple to those kinds of societies, moving is an option.

[easytax]

That is the UK model for their Natl. Health Service.

Then there is the Swiss, German, Canadian model where insurance companies are NOT owned by the Govt. and docs. are not Govt. employees.

Many years ago while calling on clients in Canada, I became sick and needed medications with very limited treatment, etc. (NOTE: not life threatening per se but being a guy -- felt like it). My one client called around and couldn't get me seen. I also called around and was told basically --- wait a week, maybe we can see you then, etc.

On way back to hotel I saw and then called a doctors office seen by the hotel ---- same answer UNTIL --- I mentioned all I needed was med's and my US Dr. wasn't authorized ---- person then stated "You're American?". When confirmed and that I WOULD BE PAYING AMERICAN CASH -- I was seen as soon as I could get to the office --- med's RXed, and "I'M ALIVE" (not a ghost writing this post).

Point: Yes, our medical system is broken and we do need reform : opinion: NOT a 2000+ page (insert any political rhetoric) that doesn't address causes but basically just adds regulations with costs to the user WHICH COULD just as well have been done by the government telling --- here's the new rules, requirements, etc. -- don't like them --- get out of the business ---- instead of just making deals that help the insurance companies at the expense, etc. of the people.

Original point: Our system is still the best out there, as is our country: we have faults, we need to work on them, given the proper leaders we will fix them. Even though without the government, I'd be on the street, I still support less government intervention and regulations that hurt the people and small business, etc. while keeping "politicians" in power, just to keep their power.

[Guest Taxed]

My Canadian friends tell me that they have privately owned Urgent Care clinics there that does not require appointments. It is a walk-in clinic. If it is something serious that they can't handle they transfer you to a hospital emergency room.

Perhaps where you were they did not have one??

Many years ago while calling on clients in Canada, I became sick and needed medications with very limited treatment, etc. (NOTE: not life threatening per se but being a guy -- felt like it). My one client called around and couldn't get me seen. I also called around and was told basically --- wait a week, maybe we can see you then, etc.

[easytax]

My Canadian friends tell me that they have privately owned Urgent Care clinics there that does not require appointments. It is a walk-in clinic. If it is something serious that they can't handle they transfer you to a hospital emergency room.

Perhaps where you were they did not have one??

Don't know when they started the "Urgent care" or if maybe I didn't qualify --- my experience was in early 90's (1990's, just in case someone might think 1890's :-) I'm antiquated but not really "old").