Health Care Law "a Maze" for Small Businesses

Nov 18, 2013

Credit Darnyi Zsóka / Creative Commons

When the Affordable Care Act is fully implemented, large companies will be subject to a penalty if they don't provide coverage for their workers. But life is also changing in unexpected ways for small companies as the health care rollout continues.

Early one  Friday morning, several dozen local businesses have turned out for an education session in Norwich aimed at answering at least some of their questions about the new health care law. After the session, business owner Linda Philips said while she appreciated the effort, there were still more questions than answers. "I feel like I'm in a maze," she said. "I don't know where to go. The answers aren't clear. The answers are very confusing."

Philips owns Nature's Art Village, a tourist attraction in Montville. She already provides health insurance for some of her workers, but she doesn't yet know how the law will regard a seasonal business like hers. She has 15 full-time, year-round employees, but said she hires up to 30 temporary workers in the summer. "Where do they fall in this is very confusing," she said. "And they're now telling me they have a formula to calculate how many hours everyone will work, and it's almost not possible."

Her case, and that of almost every small business you talk to, illustrates that because of the multiple provisions in the law, there is no one-size-fits-all solution. Phil Boyle, from the state's health care exchange, Access Health CT, admitted it's tough to address all of this in a general education session. He said he's happy to see the involvement of insurance brokers in the system. "We are getting a very big support from brokers," he said. "We had anticipated that we would engage about 250 brokers in the state. The last report I saw, I think we were up to about 400."

One of those brokers, Dave Peck, from Smith Insurance in Niantic, said he's never been so busy. "We have been very involved in this rollout," he said. "I've been in the business for 30 years. It's non-stop; it's always ongoing; no question, this is the most challenging time. Lot of 'splainin' to do, as Ricky Ricardo would say."

While individuals seeking coverage are struggling with cancelation notices, and and in some cases, huge rate rises, Jeffrey Knapp of Brown and Knapp Group Benefits in New London said for his small business clients, rates are not the biggest issue. "They've been pretty good, better than I had forecasted," he said, "which is great. What they're more surprised by is the plan designs. I think it's more of a benefits shock, versus a rate shock that people were really gearing up for." Knapp said employers may need to start getting much more involved in where their employees receive their care because of the different structures of co-pays and deductibles in the new plans.

All of this additional complexity isn't resolving things for employers like Linda Philips from Nature's Art. She said she and other small business owners may consider opting out altogether. "Some people are saying dump it," she said, "and give them all bonuses at the end of the year. The other thought from some small employers: they're going to lose their employees, because now they can go and get it through the government. Insurance is no longer an added benefit; anyone can go anywhere now. I don't know where to go with it. It's very difficult."

Access Health CT said it's had around 50 small employers apply so far to offer plans through its Small Business Health Options Program, or SHOP. Eventually, it hopes to insure upwards of 20,000 small business workers through the exchange.