The National Federation for Independent Businesses recently completed a survey of its members in order to study the impact of the Patient Protection and Affordable Care Act. Out of the 750 respondents, one out of every eight stated that have either stopped offering health insurance to their employees, or will be forced to do so in the very near future. The reason? Insurers have stopped offering many of the basic lower-cost insurance plans that are affordable for small businesses. The Daily Caller reports:
Among the most striking of NFIB’s findings was the number of employer health insurance plans that have been or will be eliminated since PPACA’s passage — 12 percent, or one in eight. Eliminating employer health care plans “is the first major consequence of PPACA that small-business owners likely feel,” the report said.
However, those plans are being replaced by new products. The number of small employers offering or not offering employee health insurance is likely to change little over the next 12 months, according to the report.
Still, the NFIB said the amount of change in plans was out of the ordinary.
“We are not aware of any data suggesting we’ve had turnover anywhere near this level in the past,” said William J. Dennis, a senior research fellow at the National Federation for Independent Business.
The NFIB study also found 20 percent of small employers expect to significantly change their benefit packages the next time they renew their health insurance plans. Almost all of them expected to see diminished benefits, increased employee costs, or both.
The study also found that small business owners with knowledge of the PPACA did not believe that it would result in less expensive health care and fewer administrative problems; rather, they believed that while more people would have access to health care because of the bill, health care would be more expensive overall and of poorer quality than what they have now, and that the bill will increase America’s debt load instead of reducing it.
It’s also interesting that in the context of the survey, “small business” was defined as having less than 50 employees. In other words, these are NOT the businesses that will be required by law under the PPACA to provide health coverage for their employees. Those businesses face a completely different set of problems. And as I (and several of my colleagues) noted earlier, businesses that employ right around 50 workers have a strong disincentive to expand and bring on additional personnel, because crossing the 50 employee threshold means that those business must now either provide health insurance for all their employees or pay penalties.
Captain Ed Morrisey noted the irony of all this compared to the “you can keep your existing insurance plan!” pom-pom waving by the Administration during the debate over the bill. He also correctly observed, “Under these circumstances, businesses can’t price the costs of their existing staffs, let alone additions to them through capital investment and expansion. When risk can’t be quantified with some degree of certainty, then risk simply isn’t taken — and we get the [employment] stagnation we’ve seen for the last two years.”
View the original report here (Adobe PDF).