In response to the new health care legislation, many small businesses plan to reduce worker hours or cut full-time positions. Under stipulations of the Affordable Care Act, employers with at least 50 full-time equivalent workers will be required to provide benefits by 2015. In response, more than half of small businesses with 40 to 70 employees plan to alter their workforce to stay below the threshold, according to a survey by Public Opinion Strategies.
When asked what personnel changes they will make, managers said they would reduce employee hours, replace full-time workers with part-time positions or hire more temporary employees. Such strategies will prevent small businesses from having to pay insurance premiums for their full-time staff.
The heightened expense of providing coverage was the main reason a majority of small businesses expressed concern about the employer mandate of the ACA, according to the survey. Among nonfranchise businesses with 40 to 500 employees, 53 percent of decision-makers believed the ACA will impact their business negatively. Sixty-four percent of franchise managers agreed. Thirty-one percent of franchise and 12 percent of nonfranchise businesses have already begun to cut employee hours in response to heightened health care costs, even though it is over a year before the mandate takes effect.
