With November elections just over a month away, small-business owners are wondering what a new administration might mean for the nation’s health-care system.
The candidates have squared off on whether or not the Affordable Care Act, President Obama’s sweeping health-care reform law often referred to as Obamacare, should survive.
Hillary Clinton has talked about strengthening the landmark act, while Donald Trump has vowed to repeal the law on his first day of office.
The dueling ideas have Pedro Alfonso concerned. The chairman and CEO of Washington, D.C.–based Dynamic Concepts, which provides infrastructure services for utility companies in the area, has long offered health insurance to his staff of more than 300. But he says the Affordable Care Act has led to more work and rising costs of some 10 percent last year, burdening the company.
“The ACA is good-intentioned,” he said. “But it has unintended consequences on small businesses — the cost of implementing it has fallen on small businesses like our own.”
The reporting requirements for small businesses, which mandate that companies with at least 50 or more full-timers create an annual report for the Internal Revenue Service listing health-care costs, have led Alfonso to implement a new accounting software system, he said. He’s also hired a new staffer to help handle the paperwork.
“It’s all new, and understanding these requirements was very difficult,” he said. “We wanted to do the right thing and not get fined.”
Like many on Main Street, Alfonso believes in offering coverage — it’s costs and regulation that have increased under the ACA that he finds concerning.
He’s not alone. The National Federation of Independent Business finds the rising cost of health care was the top-ranked issue for small companies in 2016, with 70 percent citing costs as their top concern. Separate data from the National Small Business Association finds 42 percent of small businesses say they’ve contacted lawmakers about health-care costs.
The ACA requires businesses with at least 50 or more full-time equivalent workers, meaning they clock at least 30 hours a week, to offer insurance to employees, giving smaller businesses with between 50 and 100 full-timers until 2016 to comply. If they opt not to comply, there is a penalty of $2,000 per worker, per year.
Tuscon, Arizona–based Shaffer Dry Cleaning & Laundry fell into that category with its nine locations and 52 full-time workers. By law, the company had to offer insurance to workers this year.
Owner Bake Shaffer said the law has burdened him and his wife. “It’s a daunting task,” he said. “Offering insurance has been the most impactful thing financially for us, but it’s also created more work for me as small-business owner — maybe an hour and a half additional work on my part each week. There are a number of administrative things that require a lot of clerical work to do correctly.”
What worries Shaffer most is the uncertainty surrounding what either candidate might do in office. Both partisan and non-partisan groups alike have spoken out on the lack of detail provided by both Clinton and Trump in terms of how they would help small businesses create more jobs. And political uncertainty, tracked by the NFIB, is at historic highs while optimism on Main Street has remained stagnant.
“I don’t know what to anticipate,” Shaffer said. “I can’t plan, therefore I make my plans on worst-case scenarios. That is not the way to run a business.”
Alfonso echoed that sentiment and would like to see more action from whoever makes it to the White House.
“Every politician wants to say small businesses are the backbone of America — we contribute to new jobs. They need to start acting like it and treating us like we are helping the economy, not hurting it.”