WASHINGTON– Small business owners told a U.S. House panel Wednesday that the employer mandate in the Affordable Care Act will pose a serious threat to the livelihood of community businesses.
Penalties for non-compliance with the insurance mandate have been delayed until Jan. 1, 2015, but that hasn’t eased the concerns in some quarters on Main Street.
“I know I am going to need to cut down on my number of part-time employees,” said Stephen Bienko, owner of Bienko Enterprises Moving Line in Fairfield, N.J.. “This means fewer hires, which will negatively impact the culture of my business.
“In small business, culture is everything,” Bienko said.
The complaints were made before a Republican-controlled Small Business subcommittee where opposition to “Obamacare” runs high.
The Republican majority in the House has refused to approve a Continuing Resolution – funding government operations – unless President Barack Obama agrees to defund or delay the new health care law. The standoff had led to a partial government shutdown, now in its second week.
Under the health care law, businesses with more than 50 employees must provide health insurance to anyone working more than 30 hours per week, or pay a fine of $2,000 per employee after the first 30 employees.
“In a time of slow economic growth, we would hope that policy would be focused on incentives for entrepreneurship and small businesses, but with this mandate it’s actually pointing in the opposite direction,” economist Raymond Keating told the Small Business subcommittee on health and technology.
Steven Hermann, vice-president of Paul’s Supermarket, said the “new definition of what full-time is going to force employers to rethink how they hire people.” Herman testified on behalf of the National Grocers Association, a formidable lobbying group.
“The supermarket industry typically runs on a 1.6 percent profit margin,” Hermann said. “Paul’s Supermarket prides itself on taking care of our employees. But we may not be able to replace everyone who leaves, we may have to make do with a little less.”
Defenders of the law also got a turn.
Looking at economic growth, the largest increase has actually been in employees’ working 35 or more hours, according to Dean Baker, co-founder of the Center of Economic and Policy Research.
“So these claims that business owners are going to have to hire fewer full-time employees…it just doesn’t seem plausible,” Baker told the panel. “Furthermore, two-thirds of people currently working part-time are doing so voluntarily.”
While the mandate requiring coverage rolled out on Oct. 1, the penalties for businesses not in compliance have been delayed until January 2015.
Subcommittee Chairman Chris Collins, R-N.Y., favors the delay.
“Let’s give our economy time to grow first, and then revisit this portion of the [health care law],” he said.