As if small business doesn’t have enough to worry about, the looming mandates for providing employee health care threatens to derail future growth trends from this most important sector. Obamacare or the Affordable Care Act has already begun to curtail business expansion, new hiring, and reduce the hours worked component in job scheduling. A recent Gallup Poll indicated that 40% of small businesses (less than 50 workers) have frozen hiring. Another poll indicated that 38% have pulled back on expanding their business. The National Federation of Independent Business has long identified increasing health care coverage costs as the number one problem in member company viability. At least the federal Health and Human Services Agency has delayed the employee multiple-provider choice plan option (SHOP) or Small Business Health Option until January, 2015. Employers are still required in 33 states affected by HHP regulations to offer a company-wide plan to employees.
So while the quickest path to building a small business is to create company awareness, strategically target product offerings to potential clients, and build service and support levels, too many owners are distracted by macro issues like health care. The owner time spent on budget and pricing implications, as well as making employee decisions based on cost considerations rather than growth needs is a drain on future results. Our health care system is broke and too expensive as everyone knows. The current prognosis seems to indicate that the proposed changes (and the effects on small business) will make us sicker before any future recovery.