You are correct. This is a growing trend for many small business and large businesses as well. The retail industry has had this practice in motion way before the Health Care Act. This is why the health care issue has been a problem for some time now. Question is, will the new act help or hinder in fixing this problem. It is my belief that it will hinder. But that is just my opinion.
The ACA employer mandate requires that applicable large employers (50+ FTE employees) offer minimum essential coverage that is affordable to employees. Applicable large employers who fail to offer affordable, minimum essential coverage will be required to pay a penalty on their tax return.
So, the Employer Mandate actually should not affect most small businesses, because it only applies to businesses with 50 employees or more. Furthermore, this mandate has been delayed until 2015, so large employers have extra time to plan. There is no ACA provision for small businesses (with less than 50 employees) to offer health insurance coverage, so the delay in the mandate and penalties has no impact.
Because there are no tax penalties for small businesses, the prevailing trend for small businesses is to offer employee health benefits through a "pure" defined contribution plan. Instead of offering a traditional group health insurance plan, the business provides employees tax-free health care allowances. Employees use these allowances to be reimbursed for individual health insurance policies, which they will be able to buy through the exchange and possibly be eligible for tax subsidies (which they would not be eligible for with a group insurance plan offered by their employer).
In the end, the health care reform should be a good thing for both small businesses and employers - it will give employers control of healthcare costs, and employees more choice and benefits.
This all sounds good on paper. As it stands, many small business owners (such as ourselves) can barely afford the "pure" defined contribution plan. Large companies are also struggling. Which is the original problem. As you have stated, nothing will take effect until 2015. This problem is here and now. Who knows if by then, new laws and new changes will be mandated to make the 2015 null and void. Anyone elses thoughts on this?
With the Affordable Health Care Act likely to remain the law, do you expect to see an increasing reluctance for small business owners to hire full-time employees? Will small businesses be more likely to hire part-workers and restrict their hours to (30 hours or less) in order not to be subject to the health care mandate. In working with Dallas IT Staffing Agencies, I see this is as trend that will not bode well for business owners or their employees.