What Is a Small Business? And how will the Affordable Care Act affect them?

“The sky is falling, the sky is falling.” Said Henny Penny the chicken of the fable. Henny Penny was wrong. Sen. Marco Rubio says under Obamacare “75% of small businesses now say they are going to be forced to either fire workers or cut their hours.” Paul Bedard of the Washington Examiner’s “Washington’s Secrets, says, “74% of small businesses will fire workers, cut hours under Obamacare.” And other modern Henny Penny’s are yakking it up about the sky falling under Obamacare and they are as wrong as the original Henny Penny. FOX news feeds all this nonsense.

     Marco Rubio  Give the man feathers.

First, what is a small business? When I think of a small business, the first image that comes to mind is a Mom and Pop store that may not have any hired employees for a few high schoolers helping out part-time. Rubio is talking about the businesses that have 50 or more full-time employees that will be required to provide affordable, comprehensive health coverage’s or face $2,000 penalties for each full-time worker after the first 30. Those certainly are not mammoth businesses, but small? Also it just doesn’t ring true.

So, how did Rubio and the other Henny Pennys come up with their data. Well, a survey was made by the Chamber of Commerce with the following options for “small businesses” to check: a. reduce hire to avoid this mandate (24%); b. cut back hour to less that fulltime employees (27%); c. stop providing health insurance; d. Replace full-time workers with part-time (23%); e. none of the above. Yep, 74% if you add those up. However, that ignores those who didn’t answer the survey and give no responses to c and e. Smoke and mirrors time.

How many would cut back hours or replace fulltime workers because of this law – 5- 9%

We also need to bear in mind that most companies have 10 or less employees, which better fits my idea of a small business. The group that has between 25 to 49 employees the Rubio laments about; 87% of them already proved health benefits (Kaiser Family Foundation’s annual employer survey.) As companies that have between 50 to 199 employees, 94% of them already offer benefits.

Are these businesses worried? Of course, that is the nature of the game. But the 75% numbers that Rubio and others cite are hogwash. Or, as PolitiFact says, it is a “pants-on-fire” lie. Again as they say, Categories don’t add up

The study was conducted among a national sample of 1,300 executives for small businesses, defined as fewer than 500 employees and with annual revenue less than $25 million. It included chamber members and non-members "weighted to be representative of the small business population."

The chamber told us executives were first asked whether the employer mandate would affect them:

As a result of the health care law, the employer mandate will require employers with more than 50 full-time workers to offer health coverage to all full-time employees and their dependents or face a penalty. The law defines a full-time employee as someone who works 30 hours per week and the penalty is based on the number of full-time employees. Will you be impacted by the employer mandate?

The result of that survey was 17% that 17% was then asked to respond to the 5 questions mentioned earlier.

Since most small businesses don’t know how the law will affect them, perhaps it is more prudent to wait and see when the law comes into effect.