Health Care Costs Stymie Small Biz Growth

Health care costs are the biggest concern for small businesses in the U.S. and are reportedly hurting “a lot,” according to the latest Gallup poll. Health care costs just beat out taxes on small businesses.

According to the poll, 54% of small-business owners said health care costs are hurting their businesses “a lot” and 19% said they are hurting a little. Right behind the top concern was taxes with 53% saying they are hurting a lot.

Health care costs are also preventing small businesses from hiring, according to Gallup. A separate question asked owners who said they weren’t hiring to rate eight reasons and 61% said the potential cost of health care. However, that’s only fourth on the list.

The top reason owners aren’t hiring is simply because they do not need the help (81%), followed by worry about revenue and sales (74%) and worry about the overall U.S. economy (66%).

“U.S. small-business owners are clearly concerned about how healthcare costs are affecting their companies,” according to the Gallup survey results. “These worries are likely tied — at least in part — to the implementation of the Affordable Care Act (ACA) and its potential impact. Small-business owners are trying to keep their workforces under 50 employees so they are exempted from key parts of the act and in this regard are reducing employee hours so they are not counted as full time.”

Although, ACA doesn’t levy any penalties until 2014, small-business owners need to start considering it now as those penalties will be based on employees in 2013.

For more information on how ACA’s impact on small and large businesses, click here.