Waterloo-Cedar Falls Courier, Iowa, Jim Offner column [Waterloo-Cedar Falls Courier, Iowa]

July 21--One thing to remember about businesses and the new Obamacare health insurance overhaul is that companies will survive. They'll just have to make do with fewer resources.

Individual workers, on the other hand, stand to lose a lot.

Financial expert Clark Hodges perhaps put it best:

"You have to remember that businesses don't exist to employ people; they exist to make a profit," he told The Courier Wednesday, the day after the U.S. Chamber of Commerce issued some grim predictions in its second-quarter survey of small businesses.

Indeed, among small businesses in the survey, 49 percent ranked the 2010 healthcare reform law as their biggest challenge.

Seventy-one percent of small companies said the health care law makes it harder to hire, and only 30 percent said they are prepared for the law's requirements.

Among small businesses that will be impacted by the employer mandate -- that is, those that employ 50 or more full-time workers and will have to provide coverage for those employees or pay fines -- half said they will either cut hours or replace full-timers with part-timers to avoid the mandate.

The problem there, according to Creighton University economist Ernie Goss, is that most state "exchanges" that are required to be fully functional by Jan. 1, won't be. That would leave some formerly covered workers vulnerable.

"Even the exchanges that will be up and running will face problems," he said. "Individuals that are newly mandated can receive heavily subsidized insurance coverage, even though their incomes are well outside the legislated range for subsidies."

He added that some companies that employ 50 or more workers that now provide insurance coverage may drop coverage Jan. 1, since it will be assumed that the employee can obtain coverage via the exchanges, Goss noted.

In addition, 24 percent of surveyed businesses said they will reduce hiring to stay under the 50-worker threshold.

Note that under Obamacare, all workers logging only 30 hours -- not the traditional 40 -- are considered "full-time."

The administration recently decided to give businesses an extra year to comply, but many are trying to get ready anyway. The delay does not apply to individuals, who, under the law, still have to buy insurance or pay a fine.

It's becoming clear that those who passed the law don't understand it, either, Goss said.

The outlook, from an employment standpoint, may be grim, but businesses will continue to perform their functions, Hodges said.

"Businesses will do what they need to make a profit," he said. "I think there will be a lot of full-time workers go to part time just to prevent the added cost to this new law."

Perhaps the poster child for what to expect from businesses, as they plan for implementation of the employer mandate is the New York-based Wegmans grocery store chain, which last week announced it would cut health care for part-time workers. Note that this is a company that had voluntarily offered part-timers coverage before the government got involved in the health insurance business.

Hodges said it could be a sign of things to come from other employers, especially now, with an extra year to execute a plan.

"You've got a full year of these companies figuring out ways to adjust to it and make a profit," he said.

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