Survey Finds Small Businesses May Remain Small Under Obamacare

By Nathan Elliott, News 9

OKLAHOMA CITY -- A survey of business owners finds small businesses may remain small to avoid employee health coverage required by the Affordable Care Act, commonly called Obamacare.

Oklahoma City-based staffing firm Express Employment Professionals surveyed business owners, hiring managers and human resource professionals on the ACA and its impact on hiring decisions.

The survey found that 70 percent of survey respondents whose companies have 45 - 49 employees said they would try to remain under 50 employees. Businesses with 50 or fewer full-time employees do not face a penalty for not offering health coverage under Obamacare.

Meanwhile, 67 percent of companies with more than 50 employees do not plan to reduce their number of employees. Only 10 percent of respondents said they would reduce the hours of their full-time employees to less than 30 hours a week, according to the survey.

"Because of the ACA, many small businesses have an incentive to stay small," Bob Funk, CEO of Express said in a press release. "That's the most troubling take away from this survey [is that] the ACA creates a disincentive for businesses to expand beyond 50 full-time employees."

The survey was conducted in Dec. 2013 and results were based on 1,100 responses. Proponents of the law said before the ACA, fewer small businesses were offering health coverage and reform was needed.

Insurance coverage at businesses with fewer than 50 employers declined by more than 7 percent between 2003 and 2010, according to The Commonwealth Fund Biennial Health Insurance surveys.

The Obama administration announced in February that businesses with 50 to 100 employees will have until 2016 to phase in health care coverage for employees who work more than 30 hours a week, or face penalties.

Employers with more than 100 workers could face penalties if they don't make affordable coverage available beginning in Jan. 2015. The deadline for individuals to purchase health insurance is March 31.