U.S. Markets open in 8 hrs 50 mins

Maybe Obamacare Won’t Wreck Businesses After All

Rick Newman
Senior Columnist
The Exchange

In Washington, D.C., the battle over Obamacare is a fight to the death, with Republicans vowing to repeal it and Democrats determined to keep it alive. But many businesses seem to have a calmer attitude that basically amounts to “whatever.”

A new survey on Obamacare by consulting firm PwC found that businesses are basically doing what businesses do when faced with a problem: solving it. PwC polled senior executives at 210 medium-sized and large companies and found that 72% feel their companies are prepared for the new rules they must comply with under Obamacare (otherwise known as as the Affordable Care Act, or ACA for short). More than half the firms polled say they’re already in compliance with the requirements. And the survey was done before the Obama administration delayed many of the employer requirements by one year, which will now make the implementation date January 1, 2015.

Obamacare isn’t shaping up as much of a job-killer, either, even though Republicans claim the law “will eliminate jobs, reduce hours and wages, and limit future job creation,” as one report states. Only 1% of companies in the PwC survey said they plan to reduce employment in order to fall below the 50-employee threshold that makes companies exempt from the ACA. And only 3% of firms plan to drop health care coverage for their workers and turn them over to one of the new insurance exchanges the law sets up.

There are some limitations to the PwC survey. It only includes privately owned companies, not publicly owned ones. And since the average revenue of companies surveyed was $289 million, the results don’t capture the concerns of small-business owners.

The large gap

But the PwC survey does reflect the large gap between the fiery and often scary-sounding rhetoric on Obamacare, and the more prosaic reality many companies will probably face. The ACA is a fiendishly complex piece of legislation to start with, and many foes of the law have exploited that complexity to make bogus claims about how Obamacare will put the IRS in charge of your health care, force people who already have insurance to give it up and basically wreck the whole U.S. economy. Exaggerations about the damage Obamacare may cause no doubt help explain why Americans are worried about the new law, which Obamacare bashers surely know.

Some small business do have legitimate concerns about the reforms, especially those near the 50-employee threshold that don’t already offer insurance and could end up paying sizable penalties. But many firms of that size already offer insurance, which means they probably wouldn’t be affected. Smaller firms are exempt from the law, and some may even qualify for tax credits that will help offset the cost of coverage for their workers. “I don’t think it’s going to be as bad as a lot of business owners fear,” says Gene Marks, owner of the Marks Group, a 10-person consulting firm outside of Philadelphia. “We’re used to rising health care costs. We’ll deal with it.”

The real problem with Obamacare may be the massive confusion surrounding the law. About half of all Americans say they don’t know enough about the law to understand how it will affect their own family. For small businesses that don’t have HR departments or a big cash cushion, the biggest fears may be a new crush of regulatory paperwork and the many unknowns relating to how Obamacare will change the whole market for health care. “No one has thought out this law fully or estimated what the costs will be,” says Marks. “No business owner make a decision like that. It irks them.” With a little luck, however, that may be the worst thing Obamacare does to businesses.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.