Health care costs continue to bedevil managers of small-to-mid-sized businesses. But talent acquisition is quickly catching up to health insurance as a limiting factor in their growth, and the competition from U.S. and foreign firms is heating up.

These are some of the high-level findings of a comprehensive study produced by Lucas Group, a national recruitment firm specializing in search and placement services for strategic business functions. Lucas does a quarterly survey of top executives in this business segment, and found that many are redesigning health plans to try to adjust to the effects of the Patient Protection and Affordable Care Act.

The SMB Job Generation Outlook probed respondents on the PPACA as businesses with 50 or more employees get ready for the law’s employer mandate that will require them to provide health insurance to employees or pay a penalty.

Overall, less than half the respondents said they were reasonably sure they would be able to comply: 45 percent said they were ready, up from 39 percent a year ago. Another 38 percent said they were approaching PPACA readiness status. About one is 10 said they wouldn’t do anything to prepare for the mandate.

Among plan design strategies the respondents are anticipating to both rein in costs and address PPACA:

29 percent said they will review plans periodically and may change their health care provider or plan.

  • 25 percent will increase employee contributions.
  • 10 percent will enact higher deductibles/copays.
  • 10 percent will engage an employee health education/wellness program.
  • 9 percent will cut back on full-time employees or cut hours to part-time.
  • 6 percent will cut benefits.

Another 14 percent said they “will do nothing and absorb the costs,” and 22 percent cited other strategies, including:

  • “We expect a congressional exemption from PPACA.”
  • “Will no longer hire smokers.”
  • “Charging more to customers.”

“We often hear politicians cite small and mid-sized businesses as those that may be affected most by the Affordable Care Act,” said Scott Smith, chief marketing officer at Lucas Group. “Our quarterly survey goes to the source, and while rising health care costs continue to appear unabated, SMBs across the country are struggling to find solutions that work for their companies, their employees and their bottom lines.”

Despite concerns about health insurance, these business executives are also focusing on acquiring the talent they need to compete as the economy recovers. Forty-four percent plan to hire additional employees in the next quarter, and 68 percent said they were somewhat or very optimistic about their company’s economic prospects for the coming quarter.

Nine in 10 described their business as either stable or growing. But it’s not easy to find talented people to fuel that growth; 61 percent said it is difficult or extremely difficult to find qualified candidates for open positions.

“The challenge gap between health care costs and talent availability has been closing and reached its smallest difference in Q3 at only three points,” Lucas said. “Marking a survey high, 29 percent of Q3 respondents cited talent availability as their chief business concern. This narrowing is consistent with the findings that SMBs are reporting increasing difficulties in finding qualified professional talent, with 61 percent reporting hiring difficulty in Q3.”

via Businesses not ready for employer mandate | BenefitsPro.