Businesses Question Health Care Law Requirement

Some businesses say they’ll be forced to hire fewer people or cut employee hours to avoid having to offer insurance coverage to workers under the new health care law.

But an economic researcher says there’s too much misinformation circulating about the law, and that there’s no data to support claims that companies have already been cutting workers hours.

These views were expressed Wednesday at a House Small Business subcommittee hearing to look into the part of the law that requires companies with 50 workers or more to offer an affordable insurance plan to those working an average of 30 hours a week in any month.

Raymond Keating, chief economist of the Vienna, Va.-based Small Business & Entrepreneurship Council, cited hiring data and several private surveys — some on what businesses have done since the Affordable Care Act was passed in 2010, and some surveys on what businesses might do in the future. Keating said those all showed that costs and incentives under the law known as Obamacare push many small and mid-size businesses toward cutting back on the number of workers or hours.

“In the end, it’s clear that Obamacare serves as a very real drag on economic and employment growth,” he said.

But Dean Baker, co-director of the Center for Economic and Policy Research Businesses, said people “are being fed fears” about the law. He said the vast majority of small businesses won’t be affected by the law because they have fewer than 50 employees, and that the overwhelming majority of those with more than 50 already provide coverage voluntarily.

Businesses that don’t comply with the law have to pay a penalty, which Baker said might be an incentive for some to cut work hours below 30 for part-time employees. But government data from January through June, when businesses would have been positioning themselves for the law’s launch, did not show that happening, he said.

That coverage mandate for businesses was supposed to take effect Jan. 1, 2014, but the Obama administration unexpectedly delayed it a year to address employer complaints.