Beyond Anecdotes: Obamacare Will Hurt Employers and Employees

Nov 13, 2013

For months, supporters of the president’s health care law – including economists and even administration officials — have argued that there was no “hard data” that could link employee hour cuts to the new law. They contended that any stories suggesting that small businesses were cutting hours to comply with the 30-hour per week threshold in the health care law were purely anecdotal.

Today, the International Franchise Association (IFA) and the U.S. Chamber of Commerce are able to provide numbers that suggest that the health care law will result in higher costs for employers, less health coverage for employees, and yes, cuts in full-time employment.

According to the survey commissioned by the two groups and conducted by Public Opinion Strategies, 31% of franchise and 12% of non-franchise businesses report that they have already reduced worker hours because of the impending law, more than a full year before the employer mandate goes into effect.

Additionally, 27% of franchise and 12% of non-franchise businesses report that they have already replaced full-time workers with part-time employees because of the law.

Bruce Josten, executive vice president for Government Affairs at the U.S. Chamber says, “This study confirms that the Affordable Care Act is already resulting in higher costs. Even despite the employer mandate delay, these higher costs are forcing business owners to cut full-time jobs.”

“This research clearly confirms what the anecdotal stories have already conveyed. Small business owners are already cutting full-time jobs and reducing hours for many of their employees due to the ACA,” says IFA President & CEO Steve Caldeira. “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.”

Surveyed employers also say they plan to drop existing coverage in 2015 due to the law. Twenty-eight percent of franchise and non-franchise businesses say that the employer mandate will mean they will drop health coverage, opting instead to pay a penalty for each employee.

Truly alarming is the research that shows that the ACA’s Employer Mandate will have a HUGE impact on businesses with 40-70 employees. More than 50% of businesses in this category (59% of franchisees and 52% of non-franchised) have already made personnel decisions to stay below the 50 full-time equivalent employee threshold, including cutting hours and hiring more temporary help.

One of those franchisees cutting hours is Stephen Bienko with College Hunks Hauling Junk. He was on Bloomberg news this morning discussing the survey and how the health care law was dictating his personnel decisions. 


IFA and the U.S. Chamber support bipartisan legislation introduced by Sens. Susan Collins (R-Maine) and Joe Donnelly (D-Ind.) titled the Forty Hours is Full-Time Act of 2013, which would change the ACA definition of “full-time” to 40 hours per week and the number of hours counted toward a “full-time equivalent” employee to 174 hours per month. A number of bills have been introduced by both parties addressing this issue in the House, including bills sponsored by Rep. Todd Young (R-Ind.), Rep. Dan Lipinski (D-Ill.), and Rep. Jack Kingston (R-Ga.), which the two groups support as well. The website was launched earlier this year to generate support for these bills.

Read more, straight from the franchise owners themselves, over on IFAFranBlog

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