New year, clean slate? Unfortunately, this is not the case with the government's handling of the Affordable Care Act. In fact, many small business owners are still struggling to understand and cope with the potential impact that the Act, known as Obamacare, will have on their business. This reality is shown in a recent survey of 553 small business (SMB) owners conducted by Merchant Cash and Capital (MCC), a leading alternative financing company for small businesses.

The survey, conducted in November and December of 2013, uncovered a lack of understanding and deep sense of uncertainty and fear among SMB owners around the impact of Obamacare on their business in the coming year. Nearly 40 percent1 said they aren't sure how it will impact their business. One respondent from California said, "Currently, it is just me and my husband, but I wanted to employ at least two more employees. Now I am not sure if I will be able to. I need more information on health care."

A response from a Dairy Queen franchisee in Indiana depicted a portrait of fear and remorse about the well-being of her employees, "I don't believe in it. It will affect me because I will make sure my key employees only work a certain amount of hours per week, which in turn will affect their household." An employee from Better Business Together in Arizona explained concerns her customers are having, "Many are already saying they are going to do away with as many full time employees as possible to circumvent many of the new expenses. This can only cause economic harm to our country, with less full-time employees."

Some SMB owners are already preparing for implementation and are feeling the impact on the health of their businesses in 2014. One in four2 respondents said they will halt any growth initiatives in the near future as a result of the Act. Also, one in five3 said that they will put new hiring on hold as they wrestle with increasing operational expenses. An owner of a sporting goods store in Nebraska said, "In anticipation of this act, we reduced the workforce last year and are only using part-time people. We are in a highly competitive sales niche and cannot afford any increase in costs. It is hard to imagine any small businesses who can survive this bill."

The Small Business Health Options Program (SHOP) exchange is the marketplace for SMBs to choose health plans for their employees. SHOP is available now to businesses with 50 or fewer full-time equivalent (FTE) employees, and will be available to businesses with up to 100 FTEs starting in 2016. Businesses choosing to use SHOP must offer the chosen coverage to all full-time employees and in many states, at least 70% of those employees must enroll.

The survey revealed a small portion of small business owners who are already planning to sign up for the SHOP exchange. Nine percent4 of respondents said they don't currently offer insurance but plan to use the exchange to provide employees with coverage. And, 5.42 percent of respondents said they currently do offer health insurance to employees, but will switch to a new health insurance plan provided through the exchange. An entrepreneur in the travel industry said that she is hoping the Act will balance itself out, "Some businesses and individuals will be burdened with higher costs, but others will be able to attract and retain employees because of being able to offer affordable care."

The survey findings shed important light on the education and understanding needed around what Obamacare means for the future economic confidence and growth. "Small business confidence is critical to the progress of the current recovery," said MCC CEO Stephen Sheinbaum. "While we see that the economy is improving and our customers are charting growth, it is clear from the survey that continued fear and doubt surrounding the rollout of Obamacare could potentially temper this positive momentum."

Survey findings and the Effect of Obamacare on Businesses infographic data verified and audited by Premier Consulting Partners via First National Administrators.

About the survey

MCC conducted the online survey of 553 small business merchants (revenues under $10 million annually) in November and December 2013.

About MCC

Since 2005, Merchant Cash and Capital, LLC, has been one of the nation's business financing leaders. MCC has provided more than $600 million in financing to over 12,500 distinct customers and a total of over 27,000 advances. For more information about MCC and its innovative small business-focused funding programs, please visit us at www.merchantcashandcapital.com or call 1-866-792-9366.

About Premier Consulting Partners and First National Administrators

Premier Consulting Partners and FNA partner to design health care reform compliant benefit plans and products for companies of all sizes. For more information about the Affordable Care Act and Benefit Package Planning from Premier Consulting, please visit www.premierconsultingpartners.com or call 516-358-3872.

1 Exact percentage: 36.53 percent

2 Exact percentage: 22.06 percent

3 Exact percentage: 19.53 percent

4 Exact percentage: 9.22 percent

Peppercomm
Lauren Parker, 212-931-6143
lparker@peppercomm.com