Tags: Obamacare | Small | Businesses | Drop | Coverage | health | insurance

Obamacare May Cause Small Businesses to Drop Coverage

Tuesday, 26 Jul 2011 08:42 AM

A recent survey by the National Federation of Independent Business, the trade group for small businesses, shows that 57 percent of a cross-section of companies employing 50 or fewer workers that now offer health coverage may stop doing so if their employees opt for coverage through government exchanges.

Moreover, a far larger destabilization of healthcare coverage could be in the cards, what NFIB senoir researcher William Dennis calls "the flight to the exchanges," The Wall Street Journal reports.

NFIB found that 26 percent of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31 percent of the 750 firms surveyed report they are "somewhat likely."

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If enough workers elect to depart employers’ healthcare plans, private coverage could cease to exist as an option. "Once you pull the string, everything may unravel," Dennis said in an interview.

obama200getty.jpg
President Barack Obama
(Getty Images photo)
About two of five small companies now sponsor insurance, a percentage the NFIB says has been mostly stable or declined only very slightly since Obamacare became law.

Yet 12 percent of these companies — one of eight — have either had their plans cancelled or have been told that they will be in the future. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties.

The NFIB findings support a survey McKinsey & Company released last month which showed that nearly one in three businesses may drop insurance coverage as a result of the new healthcare law.

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A recent survey by the National Federation of Independent Business, the trade group for small businesses, shows that 57 percent of a cross-section of companies employing 50 or fewer workers that now offer health coverage may stop doing so if their employees opt for coverage...
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