At the last meeting of the She Owns It business group, we talked about how, if at all, the owners expect the Affordable Care Act to affect their businesses. Several group members – Alexandra Mayzler, Jessica Johnson, and Susan Parker – were unable to attend the meeting, but they offered their thoughts in individual conversations afterward. (We had also discussed health care in a previous post.)
“I am woefully undereducated about Obamacare,” conceded Deirdre Lord, who owns the Megawatt Hour.
Beth Shaw, the owner of YogaFit, said she felt the same way.
Susan Parker said she doesn’t know how the Affordable Care Act would affect her business, Bari Jay. “I would be shocked if anyone really knows,” she added. She does, however, think premiums will go up and that small-business owners will wind up paying more. Bari Jay pays more than 50 percent of the cost of health insurance for its 16 employees. She doesn’t think any of them are uninsured, though most don’t use the company plan, which she acknowledges isn’t the best.
For Ms. Parker, the anticipated Oct. 1 start of open enrollment for the New York State Health Benefit Exchange raises nothing but questions. For example, how will Bari Jay’s costs be affected if employees choose to get insurance through the exchange instead of the company? Will Bari Jay have to continue paying to cover employees who make that choice? Will it have to contribute for employees who take advantage of a spouse’s plan?
Ms. Lord is also wondering how, or whether, her company will be affected when enrollment opens for the exchange. The Megawatt Hour does not subsidize health insurance for its five employees, but it does offer a plan at what she says she believes are better rates than an individual would get. So far, there have been no takers. The employees are either on their spouse’s plan or their parents’, she said. The company will re-evaluate its plan this fall, as it does every year.
“I would imagine getting the insurance broker out of the way is a huge savings because I think these people are taking a nice piece of the action,” said Ms. Shaw, whose company offers health insurance for its 12 employees and covers 50 percent of the cost. She added that fewer than a quarter of her employees are on the plan. She suspects that’s because the staff is young. “I think they just don’t think about it,” she said.
Alexandra Mayzler, who owns Thinking Caps Group, said, “I haven’t even had time to think about Obamacare – we’ve been offering insurance, so I’m not worried.” Specifically, Thinking Caps covers a portion of the cost of health insurance for its full-time employees – and a smaller portion for those who choose to buy their own insurance. “What I am worried about is extra paperwork,” she added.
Jessica Johnson, the owner of Johnson Security Bureau, said she understood how the Affordable Care Act was supposed to play out – hypothetically, at least. Still, she has questions about the specifics. With 115 employees, her company is not considered a “small business” pursuant to the new law, which means, among other things, that it won’t be able to buy insurance through the small-business exchange.
Ms. Johnson said she was glad the effective date of the employer mandate had been postponed a year, to January 2015. According to the mandate, employers with more than 50 employees must offer their employees health insurance plans with monthly premiums that do not exceed 9.5 percent of an employee’s gross wages. Those who don’t will be fined. Providing this insurance, in 2014, likely would have cost her company close to $220,000, Ms. Johnson said. Before the mandate was postponed, she had started searching for more affordable plans, and meeting with her company’s clients to discuss potential price increases. Not surprisingly, she encountered some reluctance.
Johnson Security offers a health insurance plan or health care savings accounts to all of its employees. The plan’s monthly premium is more than $500, and employees have to chip in. From 2012 to 2013, premiums increased 16 percent, she said.
Looking ahead to 2015, Ms. Johnson said she was facing a challenge. Prices are not yet available for 2015 insurance plans. “We can’t even do a budget,” she said. As a result, she said, she has had to walk away from prospective clients who can’t work these contingencies into their contracts.
“I just want Obamacare to make sense for my situation,” she said. Otherwise, she asked, “What incentive do I have to put more people to work?”