Study says health law spurs cut in work hours
As President Obama’s new health care law struggles to sign up individual Americans for insurance, the law is facing resistance from small businesses, according to a new report released Wednesday.
A study done by the International Franchise Association and the U.S. Chamber of Commerce found that 31 percent of franchise and 12 percent of non-franchise businesses have already cut worker hours to avoid higher costs of health coverage in anticipation of the impending mandate to provide their workers with health care insurance.
Many businesses are adjusting their workforce and payrolls to avoid facing even more requirements under the law for larger employers, the poll found.
“This research clearly confirms what the anecdotal stories have already conveyed,” said Stephen J. Caldeira, president and CEO of IFA. “This research should serve as a major red flag to Congress and the administration that unless there is a statutory change to the definition of a full-time employee in the ACA, there will be fewer full-time jobs, more part-time workers and fewer overall hours available for Americans to work as business owners adjust their workforce to comply with the law.”
Many business owners said they were already suffering negative effects from Obamacare, a year before the small business insurance mandate goes into effect. Some 29 percent of franchisees and 41 percent of non-franchise businesses are already seeing health care cost increases due to the law. The law will force 28 percent of businesses to drop coverage for their employees. According to projections, the mandate will almost double the percentage of franchise-owned businesses and more than triple the percentage of non-franchise businesses that will not offer health insurance.
“Instead of providing affordable health care coverage to employees, the law will effectively take hours and wages away from Americans who need and want full-time jobs,” said R. Bruce Josten executive vice president for government affairs at the U.S. Chamber of Commerce, which opposed the health care law.
IFA officials said that Congress could help employers by enacting legislation that would redefine full-time work status under the law.
Sens. Susan M. Collins, Maine Republican, and Joe Donnelly, Indiana Democrat, have introduced legislation called the “Forty Hours is Full-Time Act of 2013,” which would change the definition of “full time” for the health law’s purposes from 30 hours to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 17 hours per month. Similar bills have also been introduced in the House.
The survey polled more than 400 businesses, both franchises and non-franchises, with from 40 to 500 employees.