Filed Under:Markets, Employee Benefits

PPACA may slow hiring at 41% of small businesses

Owners of about 41 percent of U.S. small businesses say they are putting off hiring new employees because of worries about the Patient Protection and Affordable Care Act of 2010 (PPACA).

Dennis Jacobs, an economist at Gallup, has included that figure in a summary of results based on a company survey of 603 small business owners.

Gallup defines a "small business" as a business with less than $20 million in annual sales or annual revenue, or fewer than about 200 full-time employees.

For purposes of applying PPACA, regulators are setting the size cut-off at 50 full-time employees in some states and 100 full-time employees in others.

PPACA calls for employers with more than 50 full-time, year-round workers or the equivalent to provide a minimum amount of health coverage or pay a penalty.

Smaller employers will not have to pay the "no coverage" penalty, and, if they do not offer health benefits, their employees are supposed be eligible to buy coverage on a guaranteed-issue basis through the new PPACA exchanges, or health insurance supermarkets.

About 18 percent of the employers polled have converted full-time workers into part-time workers because of concerns of PPACA, and 19 percent said they had reduced the number of employees because of PPACA.

Jacobs did not say how many of the business owners who participated in the survey had enough employees to be above or near the small-group head count cut-off.

Gallup also asked business owners how they thought PPACA might affect the cost and quality of health benefits.

Only 13 percent predicted PPACA would improve the quality of health care, and just 5 percent think PPACA will lower the amount of money their companies spend on health care.

About 52 percent said they think PPACA would reduce the quality of health care, and 55 percent said think the law will increase the amount of money their companies spend on health care.

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Nichole Morford

Nichole Morford
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