Yesterday, the House Energy & Commerce Committee Subcommittee on Health, chaired by Rep. Joseph Pitts (R-PA), examined the job-crushing impact ObamaCare is having on American small businesses.  When ObamaCare was signed into law one year ago, President Obama and the Democrats in Washington who rammed the bill through Congress promised that it would “bend the cost curve,” “create four million jobs,” and allow Americans to keep their current health care plan.  But testimony from small business owners at yesterday’s hearing proved – once again – that the Obama Administration has broken its promises, at the expense of U.S. jobs.  One small business owner had this message for Congress:

“The bottom line is that your decisions can help or hinder us. By that I mean the laws you create will either foster an environment that gives small business owners greater confidence and certainty to grow and generate new jobs, or one that does just the opposite. Regrettably, this new health care law is already doing the latter and Congress must take the necessary action to rectify it.” (Testimony, 3/30/11)

Here are a few additional key points from the hearing: 

ObamaCare Mandates Will Force Employers to Cut Jobs to Avoid Costly Penalties:

  • Phil Kennedy, Owner and President, Comanche Lumber Company Inc., Lawton, OK: “It seems that there is one way for me to avoid paying these fines – I can either get (and stay) under 50 employees, or I can start forcing employees to part-time status, making them independent contractors, outsourcing certain services, and taking similar efforts to negate the fines. … I hope I don’t have to do any of this, but the healthcare law may force my hand, as well as that of many other small business people. I do not want to lose anyone on my payroll, but if it comes down to laying off a few employees or being saddled with these fines, I won’t have a choice.” (Testimony, 3/30/11)
  • Larry Schuler, Owner, Schu’s Grill & Bar, Marshall, MI: “We believe that offering health care coverage is the right thing to do. However, faced with these very large increases in coverage costs, which do not take into consideration the likely premium increases, it will be extremely difficult for us to absorb these costs and continue offering coverage. We cannot raise menu prices high enough to cover these costs and to do so would drive away the customers who are just beginning to return to our tables. Our only option will be to closely manage our workforce’s hours to be able to eliminate 10 [full time employees] from our staff and remain below the 50 [full time employees] large applicable employer threshold.” (Testimony, 3/30/11)

ObamaCare Is Adding to the Economic Uncertainty That Makes It Harder to Create Jobs:

  • Schuler: “Entrepreneurs, like me, are used to dealing with uncertainty and risk. We do so by preparing as best we can for the unknown. We have a glimpse of what is to come and have already begun preparing for the full implementation of this new law to preserve our businesses. It requires close examination of our employment base and how we handle it going forward. We are already an industry that utilizes many part-time employees and I believe we will see an even greater trend towards that type of employment in our industry because of this law.” (Testimony, 3/30/11)

ObamaCare Does Nothing to Lower Costs for Small Business Owners:

  • Schuler: “We employed 24 seasonal part-time employees and 5 seasonal full-time employees as well, for a total of 38 full-time employees to whom we would be required to offer coverage under the new law as a large applicable employer. Should all 38 employees opt-in to the coverage, we would see a 282% cost increase to the business over current premiums. Today, we insure 7 employees at a cost of $2,067 monthly/$24,808 annually. This would jump to $7,892 per month or $94,669 per year, if all 38 full-time employees opted into our coverage.” (Testimony, 3/30/11)
  • Kennedy: “The new health care law does not address the rising costs of health care coverage and, in some instances, works to increase costs by limiting the use and flexibility of cost-reducing policies.” (Testimony, 3/30/11)

ObamaCare Is Impeding Small Business Growth:

  • Schuler: “For some time, I have been considering several options to expand our businesses, including adding a management contract and another restaurant location. Up until recently, when I closely examined the impact of this new law on my businesses, I had not taken into account the additional costs and burdens this law imposes. I am now reexamining these expansion options and may not take on that additional growth.” (Testimony, 3/30/11)

ObamaCare May Force Small Business Employees Off Their Current Plans:

  • Kennedy: “The mandate will basically punish businesses that have 50 or more employees by fining them if they don’t offer a certain level of coverage. Even if a business does offer a ‘qualified plan,’ it still might be fined just as much. Ironically, the fine for businesses that don’t offer coverage is $2,000 per employee… and the fine for a business that does offer coverage is $3,000 per employee, plus the cost they’re paying for coverage. In other words, it may be more cost-effective for Comanche to drop its coverage under the new mandate. Considering that Comanche’s profits are about 1 percent, I am not sure how we could afford to pay these fines.” (Testimony, 3/30/11)

Republicans understand that small businesses are the engine of job growth in America, and are working to eliminate the “labyrinth of regulations and cloud of mandates” that are making it more difficult – if not impossible – to put Americans back to work.  The new House majority has already voted to repeal ObamaCare, and will continue fighting to dismantle, defund and replace the law with better solutions to bring down costs and protect jobs – including a vote today in the Energy & Commerce Committee to eliminate unaccountable ObamaCare slush funds.