Healthcare Reform Could Substantially Slow Small-Business Hiring

 A small-business survey from Gallup has found that over 40 percent of U.S. small businesses may put off hiring new employees until the full implications of the Patient Protection and Affordable Care Act (PPACA) are understood. For the survey, a small business is one with less than $20 million in annual sales or revenue or fewer than 200 full-time employees. The PPACA stipulates that smaller employers (those with fewer than 50 full-time employees) will not have to pay a penalty for not offering healthcare coverage while their employees are eligible to purchase coverage on a PPACA exchange.

Of the surveyed small businesses, 18 percent have reduced their number of full-time employees by transitioning them into part-time workers while 19 percent said they laid off employees due to the PPACA. The survey did not discuss the number of small businesses that were above the “small-group” headcount. When asked if the PPACA would affect both the cost and quality of offered health benefits, 13 percent feel it will improve the quality of healthcare while just 5 percent think it will lower the amount of health care expenditures spent buy their companies.

More than half of survey respondents think that the PPACA will reduce quality of care while 55 percent predict that their companies will be forced to increase the amount of money they spend on health care. Overall, just 9 percent of small-business respondents felt that the PPACA will be good for business, 48 percent expect it to be bad for business, and 39 percent foresee no appreciate business impact.