Photo credit: kevin dooley / Foter.com / CC BYSmall business owners aren’t
exactly hopeful about the future of the economy. According to
a
survey published earlier this month by the Chamber of
Commerce, 79 percent say the U.S. economy is on the wrong track.
The small business owners surveyed have lots of worries: 77 percent
think higher energy prices are an immediate threat to their
business, 52 percent think the tax code should be less complex, and
78 percent say they are concerned about federal debt and deficits.
At the top of the list for the last two years, though, have been
generalized concerns about economic uncertainty. In April, however,
that changed: the requirements posed by ObamaCare are now the
biggest concern for small business.

That’s hardly surprising given the tough choices many businesses
will have to face. Starting next year, companies with more than 50
employees will have to either provide sufficient coverage to their
employees or pay a per-employee fine.

Earlier this week, The Wall Street Journal reported on
several businesses choosing to pay the law’s penalty for not
offering insurance rather than comply with the law’s health
insurance requirements. In some cases, that means dropping
insurance for employees who already have it. The Journal

story profiled Rick Levi, an Iowa business owner who run a
cafeteria management service with 102 employees. Currently, he
spends about $140,000 each year insuring 25 of them in managerial
positions. But once ObamaCare kicks in next year, he expects to
drop coverage for those employees, and pay $144,000 in fines
instead. The alternative—complying with the law’s employer coverage
requirement—would cost an estimated $500,000.

Levi isn’t the only small business owner facing tough decisions
under the law. Last month, The New York Times
reported on a San Diego bakery struggling to decide how to meet
the law’s insurance requirements. Adding coverage for all of its
workers would cost about half of its profits. Raising prices to
cover the cost of insurance might make it uncompetitive with
smaller bakeries not subject to the fine. That’s why the bakeries
owners indicated they were considering reducing their 95 employee
firm down below the 50-person mark—firing some workers and
converting others to private contractors.

Other firms, meanwhile, don’t even know what sort of choices
they face under the law. Last month The Washington Post
profiled Virginia café owner Jody Manor, who employs 45 people—but
still doesn’t have clear information on how the law might affect
him, especially if he decides to expand. As the
Post reported: 

If he brings in just five more, his business would soon be
subject to new minimum coverage standards under the 2010 law — and
he does not know whether his current health plan would meet this
threshold of coverage or how his premiums might be affected.

“These changes are less than a year away, and I still have no
information about how much our premiums are going to cost,” said
Manor, owner of Bittersweet Catering, Cafe and Bakery. “It
definitely gives me pause when thinking about adding another
location.”

Nearly three years after the health-care law was
passed, federal regulators have only recently begun to define its
terms. Major pieces of the overhaul, such as state-run exchanges
that will serve as marketplaces for qualified health insurance
plans, have yet to take shape, and several rules remain unwritten.
Consequently, the picture remains anything but clear for
small-business owners, some of whom have been warned that their
premiums may spike and that their current coverage may fall
short. 

For employers like Manor, worries about ObamaCare and worries
about uncertainty are one in the same.