The Affordable Care Act has worried small business owners since before it ever passed Congress, but with the law now in full effect, the costs imposed on small businesses are becoming clearer. A new poll released Tuesday shows many small business owners are concerned Obamacare could cost them their companies.
A conference was held at Washington’s Newseum on Tuesday to release the poll, and it featured small business owners who identified their chief concern as the “Health Insurance Tax” (HIT) included in the Affordable Care Act. The Obama Administration bills this as a “health insurance fee” to be paid by insurers, but those costs are passed on as a new tax targeted at small businesses, according to the Congressional Budget Office.
The HIT will not raise costs on the plans provided by most major corporations or unions, which the IRS has excluded. These groups have a large enough pool of employees that they can “self-insure.” But that’s not possible for small businesses or individual consumers, which are left to pay the HIT in the “fully-insured” market.
According to research by the National Federation of Independent Business, the HIT will reduce private-sector employment by 152,000-286,000 by 2023. The Newseum event underscored the economic concerns as small business owners, who provided health coverage to their employees before the new law took effect, explained they are finding it increasingly difficult to cover the rising costs.
The new poll released Tuesday was commissioned by the Stop the HIT Coalition and conducted by Public Opinion Strategies. Among the key findings:
A majority of all small business owners believe their insurance costs and premiums will increase due to the new taxes placed on certain health insurance plans by the Affordable Care Act. Fifty-five percent (55%) of small business owners say their costs will go up due to the new taxes, while only five percent say their costs and premiums will decrease. Business owners with 5-49 employees believe they will be most affected, with two-thirds (66%) of these owners saying their costs will increase.
An overwhelming number of small business owners are concerned that these new ACA taxes will impact their business. Nearly two-thirds (64%) of small business owners say they are concerned with these new ACA taxes impacting their business, with just over one-third (34%) saying they are very concerned.
Small business owners say the cost of health insurance is a significant challenge to the future growth and survival of their company. Nearly three in ten (29%) small business owners say that the cost of health insurance benefits is one of the most significant challenges to the success of their company. This ranks ahead of the challenges they face with federal taxes, employee salaries, and the costs of non-health insurance employee benefits.
Among larger small businesses (those with 50+ employees), 44% of these owners say costs of health insurance benefits pose a significant challenge to their business.
Nearly eight in ten (78%) small business owners say increased health insurance costs will force them to make changes to their business. Fully one-third (33%) of owners say that due to increased costs that they will likely need to reduce health insurance offerings to their employees. And, 32% say they will delay other business investments, with another 32% saying they will stop hiring new employees.