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Health Care Is Now the Top Concern for Small Businesses For the first time in two years, health care trumps the economy as the biggest issue that small-business owners are worried about, according to a new report.

By Cheryl Winokur Munk

Opinions expressed by Entrepreneur contributors are their own.


Small-business owners are fed up with the U.S. government when it comes to health-care reform, rising energy costs and taxes, according to the U.S. Chamber of Commerce's first-quarter survey of small businesses.

The survey of 1,332 small-business executives, conducted by Harris Interactive in March, found that the majority of small businesses (79 percent) believe the U.S. economy is on the wrong track. A whopping 77 percent see higher energy prices as an immediate threat to their businesses, and 84 percent said regulations, restrictions and taxes negatively impact their ability to do business.

The findings, released on April 4, largely mirror the sentiment of small-business owners over the last few quarters, who believe Washington policies continue to impede hiring and growth. Indeed, more than a quarter of small businesses who participated in the survey said they have lost employees in the last year.

Related: Job Growth Slows Dramatically in March

"Though the general trends of the economy seem to be improving, a closer look shows full-time employment dropping," said Martin Regalia, the Chamber's chief economist, in a statement. "Washington needs to enact policies that will breed confidence and encourage small businesses to expand, instead of cutting back staff and employees' hours."

What's more, requirements of the health-care law are now the biggest concern for small businesses, displacing economic uncertainty in the top spot for the first time in two years. The Affordable Care Act, known as "Obamacare," was signed into law by President Obama in March 2010. Despite its aim to reduce health-care premiums for both individuals and small businesses, 77 percent of small-business owners polled believe the health-care law will make coverage for their employees more expensive, and 71 percent said the law makes it harder for them to hire more employees.

Related: Tax Dilemmas Add to Burden of Healthcare Reform for Entrepreneurs

Of particular concern to entrepreneurs is the mandate that companies with 50 or more workers must offer health-insurance coverage to employees or face substantial fines. In response to the mandate, the survey found that 32 percent of small businesses plan to reduce hiring, and 31 percent will cut back employee hours to reduce the number of full-time employees.

On a brighter note, two-thirds of small-business owners surveyed believe immigration reform will help strengthen the U.S. economy and increase America's global competitiveness.

Related: Entrepreneurs Support a Pathway to Citizenship for Immigrants

Cheryl Winokur Munk is a freelance writer and editor in West Orange, NJ. She is a former reporter for Dow Jones Newswires and American Banker where she covered the financial services industry. She earned a B.S. in journalism from Boston University.

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