How Will the Health-Care Law Affect Small Businesses?

Via The Wall Street Journal

The Affordable Care Act will bring significant change to the way small businesses manage health care for their employees. So today we asked The Experts: How will the health-care law affect small businesses?

John Jordan: The ACA Means Higher Costs for Small Businesses

The ACA will be a significant impediment to the growth of small business. Even though the enforcement of the employer mandate has been suspended until 2015, businesses will still be forced to absorb the higher costs of complying with this complex regulatory environment. Market conditions prevent many small businesses from passing those costs along to the customer. Further, business owners can only pass on so much of their administrative costs to employees when attracting and retaining talent is critical to success. And because businesses employing more than 50 people will be required to provide health-care coverage, many businesses will try to reconfigure their companies to employ part-time employees to avoid the mandate.

John Jordan is chief executive officer of Sonoma County's Jordan Winery, a digital wine-list entrepreneur and founder of the John Jordan Foundation.

Joanne Chang: Health-Care Premiums Are a Necessary Expense to Say in the Game

In Massachusetts, we've been paying for employee health for the past seven years. We expect with the ACA that we will end up paying even higher percentages of our staffs' health-care premiums. Like the price of gas and our rent, we view it as a necessary expense to pay in order to stay in the game. I remember my first restaurant job and not being offered insurance after having it completely paid for as a management consultant—nothing had changed except my career, and all of a sudden I was on my own for health care. I felt then and feel now that if we live in a country in which the best way to get health care is through our employer, then employers should offer it in an affordable reasonable way.

Joanne Chang is the owner of and chef at Flour Bakery + Café and Myers + Chang in Boston.

Sharon Hadary: Health Care Could Be a Great Recruiting Tool

On this issue, I write primarily from the perspective of women-owned businesses, since that is my area of expertise.

Providing health care for their employees is a high priority for women business owners, and for many years over 40% of women-owned businesses offered health-care benefits. However, as insurance premiums skyrocketed, the proportion offering these benefits declined—and this was compounded by the recession.

Small businesses have been at a distinct disadvantage in offering health-care benefits. In the past, they paid an average of 18% more than big businesses for the same or lesser coverage.

The Affordable Care Act holds the promise of giving small businesses (especially those under 50 employees—which is the vast majority of small businesses) the ability to offer robust health-care plans to their employees.

This provides small businesses a new competitive advantage in attracting talented, high-potential employees.

The challenge for small-businesses owners is that this is one more thing to figure out piled on top of all the other responsibilities of running a business. Some of the women business-owner organizations already have been offering seminars on the Act. Small-business associations can play a critical role in the implementation of the Affordable Care Act by offering training not only on how the Act affects small business, but also on how to make it work for them. Owners of small business need to take the initiative to learn how to realize the benefits of the Act for their employees and their companies.

Sharon Hadary is the founding and former executive director of the Center for Women's Business Research and an adjunct professor in the Doctorate of Management Program at the University of Maryland University College, and has co-written a new book, "How Women Lead: The 8 Essential Strategies Successful Women Know."

Richard Duncan: Benefits Should Be Earned, Not Expected

I see this as a step closer to entitlement, and health insurance won't be called a benefit any longer. Our company, like many, offers health insurance (as well as other benefits) as a means of creating a great environment for our staff and providing extra perks for those who are a huge part of our business success. When providing health insurance becomes mandated, we create a workforce that expects benefits vs. one that works to earn their benefits. Without the ability to offer additional incentives to work for our company, we lose the ability to be competitive in our industry. Eventually, prospective employees will have little to use as determination of what makes one company better to work for than another. I feel that mandating insurance hinders the ability of a small business to offer perks and benefits that other companies may not. Without this, it will be even more difficult for small businesses to build loyal, competitive teams with employees who will be long-term.

Richard Duncan is the president of Rich Duncan Construction in Salem, Ore.

James Schrager: Small Businesses Face a Known Unknown

It remains unclear what the effects on small business will be, even though both sides of the debate have screamed at us for years on the possibilities. At this point, it is yet another unknown entrepreneurs must face.

James Schrager is a clinical professor of entrepreneurship and strategic management at the University of Chicago Booth School of Business.