Small business insurance costs up; report finds flawed Obamacare rollout a contributing factor

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A new report finds that health-care insurance premiums for small businesses are up in 2013.

Two-thirds of small businesses report paying more for insurance premiums per employee this year than they did in 2012, according to a new study from the National Federation of Independent Business released Thursday.


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The pro-business nonprofit group found in a survey of almost 1,000 small businesses that owners pay an average of $6,721 a month, or $80,652 a year, to provide health care insurance to their employees.

The report found that most employers are trying to shield workers from the cost increases.

Two-thirds of employees pay the same price for deductibles as they did last year, but 28 percent pay more, and only four percent pay less.

Owners are also covering higher insurance premiums, with 66 percent of small businesses cutting into profits to pay for cost increases, while 40 percent delayed, postponed or eliminated business investment to make room for health insurance. Nearly half of employers also sought to increase productivity to pay for the costs.

The authors of the study say the Obama administration’s flawed rollout of the Affordable Care Act is part of the problem.

“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,” said William J. Dennis, the author of the study and a senior fellow at the NFIB Research Foundation. “Ironically, had they instead made reducing costs a priority, this would have been a natural incentive for increasing coverage. Unfortunately though, this single-minded approach resulted in a law with a rising price tag, and Obamacare’s authors failed to consider that someone has to pay for all the bells and whistles included in the law. That ‘someone’ it turns out is often the small-business community — small employers, their employees and their families.”

The NFIB surveyed 921 small business owners from around the country for the Small Business’s Introduction to the Affordable Care Act study. The group will be surveyed once a year for three years to track the impact of the Affordable Care Act on their finances.

“We see the results of this year’s research as establishing a baseline; what we will learn from the developing responses in the next two years will tell us more and more about the law and how it changes — or does not change — the behaviors of the small-business community,” Mr. Dennis said.

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