64% of Small Businesses Report Higher Health Insurance Costs
A survey of small business owners shows that 64% have seen health insurances costs rise, but employers are far more likely to cut profits and increase losses than they are to cut employees or reduce their hours.
The membership survey by the National Federation of Independent Businesses (NFIB), titled "Small Business's Introduction to the Affordable Care Act, Part I" shows that nearly two-thirds of businesses are experiencing higher health insurance costs this year - but, only 17% paid for the higher costs by cutting employees or their hours.
Fully 66% said their reaction to the higher costs was to "take a lower profit or suffer a loss" - by far, the most often-cited response. Only 30% said they raised prices to offset the cost.
The most often-cited ways small business owners paid for the higher health insurance costs are:
- Take a Lower Profit or Suffer a Loss: 66%
- Became More Productive, More Efficient: 48%
- Delay, Postpone or Reduce Business Investment: 40%
- Freeze or Reduce Wages: 37%
- Raise Prices: 30%
- Increased Employee Cost-Share: 30%
- Cut Employees or Reduce Their Hours: 17%
- Take the Health Insurance Tax Credit: 17%
- Reduce Non-Health Employee Benefits: 12%
The average increase in health insurance cost was about 12%, the NFIB survey shows. And, more than seven times as many employers saw costs rise (64%) than enjoyed lower costs (9%).