Obamacare Is Not Causing Small Businesses To Drop Their Employees’ Coverage

Several studies have already debunked the conservative assumption that President Obama’s health care reform law will negatively impact the economy by discouraging small business owners from hiring. In fact, there is no evidence to suggest that Obamacare will require small businesses to provide expensive health care plans that they can’t afford.

And a new study assuages similar fears that small business owners might drop coverage for their employees before Obamacare takes effect in order to avoid being hit with crippling expenses. The Midwest Business Group on Health surveyed businesses across 16 states, ranging in size from small companies with fewer than 1,000 employees to larger corporations that employ more than 5,000, and found “little indication that employers plan to drop health care coverage.”

As Forbes reports, while employers understand that they may want to adjust the scope of their health benefits plans, they are not anticipating the need to drop coverage for their employees because of the health reform law’s implementation:

“Employers still believe that health benefits are vital to attract talented employees and maintain a productive workforce,” said Scott Thompson, president of the healthcare practice of The Benfield Group, a market research and strategy firm that collaborated with the Midwest Business Group on the study. “This research found that most employers, especially those with more than 200 employees, will not drop employee benefit coverage in the foreseeable future.” […]


“After 2013, the majority of employers responded that they will be adjusting to the ‘new normal,’ making changes to their benefit design strategy in response to the post-ACA environment,” said Larry Boress, president and chief executive of Midwest Business Group, which represents more than 100 companies that purchase more than $3 billion in health care services annually. “The majority plan to continue to offer benefits.”

In fact, some studies project that the health care reform law may actually lower costs for small business owners, thanks to the tax credits that Obamacare provides employers to help them purchase insurance. And that isn’t Obamacare’s only positive impact on the economy. Nearly 29 million Americans will receive significant tax cuts under the health reform law, and it will also help create nearly 4 million jobs over the next decade.