Even though the Affordable Care Act (ACA) employer mandate has been delayed a year, heathcare costs remain the number one economic concern for U.S. small businesses. And surveys by Sageworks and U.S. Chamber of Commerce found that most business owners expect their insurance costs to increase under ACA.
To hear these concerns directly from the source, the Senate Committee on Small Business and Entrepreneurship held a hearing Wednesday where a handful of small business owners offered their takes on how ACA was going to affect their business, for better or worse.
Here's what they had to say:
Jim Houser, co-owner of Hawthorne Auto Clinic in Portland, Oregon, provides health care to nine full-time employees and their families.
"In 2011, for the first time in my memory, our health insurance premiums actually declined, and by over three percent. You might think this was a fluke, but it wasn’t; when 2012 rolled around, our premiums declined another three percent," he told the committee. "The ACA is working for small business."
Jamal Lee is the owner of Breasia Studios, a small audio, lighting, and video production company in Laurel, Maryland.
"I’m one of those employers with fewer than 50 full-time-equivalent employees. Starting next year, I’ll be able to use our state small business health insurance exchange to purchase coverage. This is huge," Lee said.
"Presumably, this will make the market more competitive and I expect prices to come down as a result. Simply knowing I’ll be able to shop for other plans as insurers change and costs fluctuate makes me feel more secure."
Larry Katz, president and CEO of Dots Diner restaurant group in Metairie, Louisiana, owns six diners.
"We currently employ 65 full time employees and thus, will not be able to benefit from most of the subsidies and tax credits offered to smaller companies under the ACA," Katz told the committee.
Consequently, Katz will be discontinuing healthcare coverage currently offered to his employees, since "the penalty, while huge, is less than the costs of offering the required coverage to all of our employees." Katz could also sell or close two of his least profitable diners to meet the 50 full time employees limit.
"Isn't it shameful position to be put into? I, the business owner, am now forced to put 16 people out of work just to save himself from the negative effects of the ACA," he said.
Kevin Settles, president and CEO of Bardenay Restaurant and Distillery in Boise, Idaho, testified on behalf of National Restaurant Association. He advocated for greater flexibility within the implementing regulations when it comes to employers with many part-time, seasonal, or temporary workers.
"At Bardenay, we have redefined who is a full-time employee because of the definition within this law. And it will have an impact on my employee's ability to pick up extra hours when they would like them," he said.