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For nearly three decades, small-business owners have warned Washington, D.C. that the steadily rising cost of health insurance weighs heavier each year on their operations. Nearly two-thirds of owners surveyed recently by the National Federation of Independent Business Research Foundation reported higher insurance premiums in 2013 than the year before, confirming again that the cost of health insurance remains their No. 1 business problem.
Faced with average premium bills of more than $80,000 a year, owners are struggling to defray costs and shield their employees. Two-thirds reported giving up some profits, nearly half wrangled productivity increases and two-fifths postponed or cancelled investments to strengthen their businesses and create more jobs.
Not only have their pleas been ignored, but Main Street firms’ fears of even higher costs are being realized as the Affordable Care Act unfolds. The administration, showing little concern for the challenges facing entrepreneurs, is focused instead on new taxes, new mandates, and higher costs.
Still reeling from the recent recession, small employers will soon find themselves saddled with additional costs, both of cash and the valuable management time this massive law will consume.
Deciphering the employer mandate, scheduled to kick in a year from now, will require firms with 50 or more employees to decode a complex measurement scheme to determine workers’ hours this year or face huge fines next year. Adding insult to injury, the government moved the goal posts to sweep more workers into the program: 30 hours per week is now full-time status.
And all employees must have access to government defined “essential health benefits,” a menu of treatment that includes everything from mental health and substance abuse disorder services, rehabilitative services, vaguely-defined ‘habilitative’ services and pediatric oral and vision services – many things they may not want or need.
Then there’s the “HIT”—a new tax on health insurance products estimated to cost small firms and their employees more than $100 billion during the first 10 years. Although levied on insurance providers, it will be quickly palmed off to small-business owners and the self-employed. In contrast to large corporate plans which will not be similarly taxed.
Amidst all the confusion however, there’s one thing small-business owners know for certain: their costs are going up even more. By exposing the nation’s job-creating small-businesses to unbearable financial burdens, the Affordable Care Act will trigger the law of gravity: job-creation and business start-ups will fall, and national economic output will plummet.
Sadly, the damage won’t end there. The entrepreneurial spirit that built America, already stalled by excessive regulation, exorbitant taxes and a steady drumbeat from those who deny capitalism’s benefits, will plunge among younger generations.
Dan Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.