Affordable Care Act uncertainty a headache for small businesses

Employers rush to do what they have to, delay what they can

9/28/2013

Business owners don’t like uncertainty, and the Affordable Care Act is creating just that for many.

By Tuesday, employers must give each worker what’s called a “Notice to Employees of Coverage Options.” They must do so whether or not they offer health insurance, and whether or not they will be required to provide insurance under the law. The notice gives workers information about exchanges and current and future health benefits provided by their employers.

Owners who plan to cover employees also must give them a “Summary of Benefits Coverage” by the start date for their policies.

The Obama Administration said Thursday that small business owners who want to use insurance markets designed especially for them will have to wait until sometime in November before they can finish their sign-ups. They still can start shopping right away on Tuesday. And even with the delay, they can get coverage for their employees by Jan. 1, when the law takes full effect.

Earlier, the Obama Administration postponed until January, 2015, the mandate for “large” employers — those with 50 or more employees — to provide health insurance or face penalties. Some Republicans have pushed to postpone — or even eliminate — the entire Affordable Care Act.

In Toledo, Bill Wersell, vice president of business development services for the Toledo Regional Chamber of Commerce, said feedback from local business owners indicates many are just trying to buy time by doing whatever they need to do immediately, and prepare to tackle the law next year.

“What we have been seeing in the community is that, due to the uncertainty of the Affordable Care Act, most of the business owners who have health-insurance programs for their employees are trying to renew their (health-plan) contracts in this last quarter of the year so that they can go into 2014 with certainty as to what their coverage and health-care costs will be,” Mr. Wersell said. “What everybody is always trying to determine is: What are we facing for the next six months?”

More than anything, Mr. Wersell added, there is a growing sense of frustration among business owners who realize how much uncertainty there is over how the ACA will work.

“It’s more frustrating because we don’t know what is going to be done and the business owner can’t plan over a two-year cycle like they prefer. They can only plan for 2014,” he said.

“An employer usually will be working right now on a cost analysis for six months to a year ahead. But if you have no understanding how this will all work, you can’t do that.”

By renewing their current health-care plans, business owners “are buying as much certainty as they can at this time,” he added.

Brian Dickens, the chamber’s vice president of public affairs, said the organization has been advising owners seeking advice to talk to their current health-care coverage providers to learn what their options are, or to consult with health-coverage brokers or consultants.

“The hard part is that every business is different,” Mr. Dickens said.

Jack Hollister, president of the area Employers’ Association, based in Maumee, said there seem to be many different strategies that local business are taking as implementation of the ACA approaches.

“Some are exploring self-insurance to be fully insured and stay in control to a greater degree. Some are trying to remain qualified as a grandfathered plan,” he said.

“But there’s so many parts of the ACA still in the process or still unknown that it’s hard to know what to do,” Mr. Hollister said. “So some are trying to make the best play that they can right now and play a little wait-and-see game.

“It’s a lot of confusion. There is a tremendous amount of confusion and adding to it, you have all that’s going on politically,” he said. “As a business owner, you do have to do something. You have to do the best you can.”

Mr. Hollister said in the past there have been large issues that had business owners scrambling to decide on a course of action, such as increases to the minimum wage.

“But with the minimum wage, you can go off on it, but at least you can live with it. You do the calculations and it’s not complicated. This thing [Affordable Care Act] is very complicated,” the association president said.

Bruce Davis, a principal in the Toledo office of Findley Davies Inc., a human resources consulting firm, said the larger employers that his firm deals with seem to have figured out a course of action — inform and educate their employees on their options.

“We deal mostly with larger employers, and those employers by and large recognize the importance of health benefits as it pertains to [the Affordable Care Act]. They are not considering dropping their [health-care] plans. They are considering strategies that will continue the offering of those health-care options and informing employees about health-care exchanges and what it means to those employees in order to eliminate all the confusion,” Mr. Davis said.

Employees who are not eligible to be in the health exchanges are being told they are not eligible, Mr. Davis said. “But they’re also making sure the employees understand that if they’re eligible and have been offered health coverage through the company plan, that they’re not eligible for those premiums or tax subsidies under the act.”

Mr. Davis said employers are also letting their workers know that if they want to disenroll from the company health plan and utilize coverage under a health exchange — and find they don’t like the health exchange — they cannot rejoin the company plan until the next open enrollment period, usually a year later. “Those are IRS rules,” he said.

The problem facing both employers and employees, Mr. Davis added, is that no one really knows much about the health-care coverage someone will get from a health-care exchange.

“What’s been disappointing is that there’s been so little about what the coverage on the exchanges will look like and what the coverages will cost,” he said.

“We’re only now just getting a glimpse of the rates of those plans under the exchange. But you still don’t have a lot of details on the services, the list of doctors, or drug coverage,” Mr. Davis said.

“I give our employers in this area kudos for giving out as much information as they can, but it’s going to be kind of relentless communications for a while as we all learn more. People will just have to stay tuned and wait for more information,” he added.

The Associated Press contributed to this report.