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Small Business Nation. A Project of The U.S. Chamber of Commerce

Despite temporary reprieve, business owners increasingly anxious as health-care law looms

July 18, 2013
The Washington Post
J.D. Harrison

Despite a temporary reprieve from some of the new rules under the health care law, business owners are growing increasing anxious about its looming implementation at the end of the year, according to a pair of recent surveys.

Only three out of every 10 small employers say they are prepared to comply with new regulations under the law, while seven in 10 say those regulations have made it more difficult to grow, according to a new survey from the U.S. Chamber of Commerce. Meanwhile, the percentage of firms expressing concerns over Obamacare have jumped by a double-digit margin since this time last year.

A quarter of business owners said they still do not even know what is required of them under the law, which was passed in March 2010.

“The impact of the health care law on small business gets worse with every day that passes,” Rob Engstrom, the organization’s senior vice president, said in a statement, noting that he expects “health care will be a defining issue for the business community” in next year’s midterm elections.

The report comes on the heels of an announcement by the administration that it would not penalize businesses that elect not to provide health insurance to their employees next year, delaying what is known as the “employer mandate” provision until 2015. One of the most controversial pieces of the law, the mandate will require firms with more than 50 employees to either cover their workers or pay a fine to the federal government.

During a House Ways and Means Committee hearing on Wednesday, Mark Iwry, a senior official at the Treasury Department, said officials made the decision to provide “transition relief” after hearing concerns from employers about the time and costs associated with reporting requirements under the health care law.

Business groups celebrated the delay, and many argued the provision should be tossed out altogether, not just pushed back. House Republicans argued the same on Wednesday.

“While the temporary relief from the employer mandate was welcome news, it didn’t solve the serious problems our local businesses are struggling with under ObamaCare,” House Ways and Means Health Subcommittee Chairman Kevin Brady (R-Tex.) said in his opening statement. “In fact, the president’s health care law, and its troubled implementation, is causing more confusion and more uncertainty which will continue to stop local businesses from hiring.”

His points were supported by the results of a study released the same day by financial services firm Sageworks. In a survey of 300 accounting professionals who work with small businesses, two-thirds said the new health care changes are making it less likely that their clients will expand and add employees, compared to only 2 percent who said the law will help small businesses grow.

Sageworks Chairman Brian Hamilton said postponement of the employer mandate will only make it more difficult for employers to plan for the future.

“The recent delay in the implementation of the Affordable Care Act, and the uncertainty that accompanies such a delay, won’t help the employment situation,” he said.” Private businesses are trying to map out their hiring and investment plans for the next 12 months, and a last minute delay like this will increase the likelihood that companies remain on the fence about hiring.”

The Chamber survey, which polled 1,304 small business executives across the country, also showed that one in four small business owners said that the law has made it more difficult to add workers. The survey has a margin of error of 2.5 percentage points.

Overall, the majority of employers who responded to the survey (61 percent) do not plan to add workers next year.

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