Survey: Health-Care Costs on the Rise for Small Businesses

Health care continues to get more expensive for small businesses across the country, according to a new survey. On Thursday, the National Federation of Independent Business released the first segment of a longitudinal survey that will track health-care expenses for the same 921 business owners over the next three years. Sixty-four percent of the small business owners reported paying more in insurance premiums per employee in 2013 than they paid in 2012. According to the NFIB, the rising cost of healthcare has been cited as the no. 1 business concern for the past 30 years. NFIB Research Foundation senior fellow and study author William J. Dennis said that the Obama administration took the wrong approach to the problem of health care in the United States – and it will continue to drive costs upward. "The law's authors were primarily focused on increasing insurance coverage and expanding benefits -- they gave little or no consideration to concerns about cost or who would foot the bill. Ironically, had they instead made reducing costs a priority, this would have been a natural incentive for increasing coverage," said Dennis. He added that small business owners are often the ones footing the bill for the expensive piece of legislation.Dealing With Increasing Healthcare Costs The NFIB survey found that small businesses pay an average of $6,721 per month on health insurance premiums, adding up to more than $80,000 per year. “About 64% of those that had insurance had costs per employee rise,” said Dennis in a conference call Thursday. He added that the average increase came to about 12%. Sixty-six percent are taking the hit in the form of lower profitability, while nearly half (48%) are looking to increase productivity to keep up. Forty percent say the increasing expenses lead to the delay, postponement or elimination of business investment. Just under half of small business owners surveyed by the NFIB are offering employee health insurance. Of those that do, 86% offer insurance only to full-time employees, while 11% offer coverage to both part-time and full-time staffers.Understanding ObamaCare From delays to rollout glitches, the NFIB says the small business community is pretty confused by the Affordable Care Act. “The law is a perpetually changing document,” said NFIB legislative manager Kevin Kuhlman in a press release. “There are thousands of pages of statute and even lengthier subsequent regulations associated with Obamacare. Couple this with the litany of delays and ‘clarifications’ we’ve seen in just a past few months, and it isn’t difficult to imagine why there is a gap between perceived and actual knowledge about the law.” Seventeen percent of business owners surveyed say they are very familiar with the law, while 49% say they are only somewhat familiar with ObamaCare. Over 40% of business owners say the media has been the primary source of information. Perhaps unsurprisingly, given the flawed rollout, only 4% say they are going to the government for answers when it comes to understanding ObamaCare.