Businesses Finding Ways to Soften Impact of Health Reform

Many businesses in low-wage industries have hired more part-time workers and cut the hours of full-timers recently to soften the impact of new health law requirements that take effect Thursday, some consultants say.

The strategies have had only a modest impact on job growth, which has accelerated substantially this year, but could take a somewhat bigger toll next year as firms gear up for an expanded health care mandate in 2016.

A majority of small businesses say the Affordable Care Act already has hurt their profits, forcing them to reduce or postpone investment, withhold raises or trim other types of benefits, according to a new survey by the top small-business trade group.

Under the health care law, businesses that employ at least 100 full-time workers — or full-time equivalents, including part-time workers — must offer health benefits to at least 70% of those working at least 30 hours a week by Thursday, or pay a penalty.

By Jan. 1, 2016, those companies must provide insurance to 95% of their workers, and firms with 50 to 99 employees must offer coverage as well.

The health coverage mandate for individuals took effect last January, but the Obama administration pushed back the effective date for businesses in 2013.

Ninety-four percent of businesses with at least 100 workers and 55% of all firms already offer health benefits to at least some employees, according to Kaiser Family Foundation and the Health Research and Educational Trust.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary