Small businesses and the ACA
Matt Paul, Reporter/Producer | 12.02.13
(Dover) -- The Obama administration announced this week that it is delaying the launch of an online health insurance marketplace for small businesses, known as the Small Business Health Options Program (or SHOP) exchange. But employers can still choose to buy the coverage offline, and they're still paying close attention to other provisions in the Affordable Care Act.
At Hively Landscapes in York County, late November is typically a time for planting and hardscaping jobs. But this year, its 27 employees are also making important health care enrollment decisions.
Owner Ted Ventre has opted for an early renewal on the company's existing employer-sponsored health insurance plan. He says the good news is premiums are only increasing by three percent; the bad news is he won't be permitted to provide Health Reimbursement Accounts (HRAs) next year.
Ted Ventre on the job at Hively Landscapes in Dover
“I said with this change -- that will cost you money, yes, it will cost you more money -- but with this change I will give you the same plan that you've had, that you're used to, that you know. You go to the same doctors, receive the same benefits,” he says, recalling a recent conversation with his staff.
“It will manage our premium costs for up to a year, and we can sit back and we can watch how the federal and state exchanges shake out, and we can watch what happens with the ACA.”
Ventre thinks locking in the grandfathered plan for one more year is the best option for his business and employees because they don't know how they'll be affected by the Affordable Care Act.
“Are our rates going to increase, are they going to decrease? Are plans going to change drastically in terms of what's available to us?” he asks. “Those are all things we weren't really sure about.”
As a small business owner, Ventre is not required to provide insurance for his employees. But he thinks it's the right thing to do.
The line of demarcation with the ACA is 50 employees. Companies with 50 or more full-time equivalent employees will have to play by one set of rules. Businesses with fewer than 50 workers will play by another.
Rob Glus, a consulting actuary at Conrad Siegel, says new restrictions are being placed on small group health insurance ratings. No longer can insurance companies vary rates based on health status, health experience or gender.
“Having those limited variables now really changes the dynamic,” explains Glus. “Depending on where you fall in that category, if you're a predominantly very young, very healthy group, you may see your costs go up a little bit. If you're a predominantly older, sicker, less healthy group, you may see your costs go down a little bit because there's no more medical underwriting for those groups anymore.”
Rob Glus chats at Conrad Siegel's offices in Harrisburg
Generally, Glus says the new standards for comprehensive care, along with new taxes on insurance companies, are expected to put upward pressure on premiums.
He says small business owners also need to think about several new disclosures and administrative duties -- whether they want to or not.
“They want to be spending time thinking about their small business, and - in a fairly rough economy - how can I keep my business afloat. Not what other administrative or compliance issues do I have to be deal with as a business that could potentially put me in a position where I have penalties that I wasn’t counting on,” he says. “It’s not feasible for small business.”
Glus says he knows everyone will want to say on January 1st whether the Affordable Care Act was a success or failure. But he believes it's going to take some time for the insurance market to settle down after so many changes.
At Hively Landscapes, Ted Ventre thinks he may be faced with a tough decision next year: whether to continue offering competitive employer-sponsored health care, or opt to subsidize his workers' plans on the individual marketplace.
Dropping the perk completely hasn't crossed his mind.
“It's all driven by customer services. To keep the customers happy I want to keep the employees happy. To keep the employees happy I have to make sure they have the things they need to live their lives. And I think health care is part of that,” Ventre says.
“If I can offer it, I will.”
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Tell us: Are you a small business owner? What are your thoughts about the Affordable Care Act and covering your own employees? Please leave a comment below.