Bismarck-Mandan small business owners expressed uncertainty over how aspects of the federal health care law would affect their companies at a roundtable discussion Wednesday.
The event at the Kelly Inn in Bismarck was hosted by the Consensus Council and members of the Stop The HIT Coalition, an organization representing small business owners, their employees and the self-employed who support a repeal of the Health Insurance Tax portion of the Affordable Care Act. About 25 people attended.
The event hosts said the tax on health insurance companies will be passed on to businesses and people buying insurance. The tax raises money on a sliding scale starting at $8 billion in 2014 and increasing to $14.3 billion in 2018.
Andy Peterson, president of the Greater North Dakota Chamber of Commerce, said attendees main concerns about the Affordable Care Act centered around increased costs, regulations and an uncertainty about what is in the legislation and how it will all affect their business.
“Uncertainty is probably the thing that is most impacting businesses,” Peterson said.
Kelvin Hullet, president of the Bismarck-Mandan Chamber of Commerce, said rather than expanding or buying new equipment businesses might be waiting to see how the law’s effects will play out. He said if North Dakota did not have a robust economy, companies would be “hammered even more.”
“I do think in North Dakota employers and employees have the opportunity to absorb some of the cost,” he said.
Marc Taylor, owner of Northern Plains Equipment, said he is spending 30 percent to 50 percent more to hire an employee than he did several years ago and the tax would take even more money out of his pockets for improving his business.
Cy Fix of Cenex Bismarck-Mandan, said his company has implemented a system in recent years that requires older employees to pay more for insurance than younger ones because they use it more. He said that helped his company reduce costs because more young people were willing to buy insurance and spread the cost around.
“Now we’re going to lose all that,” he said.
Josh Askvig, associate state director of advocacy for AARP of North Dakota, said in a phone interview that may not be the case. The Afordable Care Act allows companies to apply to “grandfather in” their insurance plans as long as they meet the necessary criteria.
Askvig said there are other benefits in the Affordable Care Act for small businesses. In 2014, businesses with up to 100 employees may be able to buy health insurance for their employees through exchanges, which will offer a range of health plans.
“If a small mom and pop business needs to buy insurance for its employees, it actually provides more opportunities,” he said.
Joe Hoffert, also of Cenex Bismarck-Mandan, said if the tax is passed through to his company by its insurance provider, his company will in turn have to pass the expense on to employees.
Askvig said that may not be necessary, though. The Affordable Care Act also offers tax credits to offset the costs for small businesses.
A business with 25 or fewer employees with average annual wages under $50,000 must pay at least
50 percent of the cost of health care for its employees. In return, the company can receive a tax credit based on how many employees it has and their average wage.
The full credit is available to businesses with 10 or fewer employees and average annual wages of up to $25,000. The full credit will help pay 35 percent of premium expenses. In 2014, the value of the credit will increase to 50 percent of premiums.
Hullet said 80 percent of business in Bismarck-Mandan have 10 employees or fewer.
Tax credits also are available to firms with 10 to 25 employees and average annual wages between $25,000 and $50,000. Small nonprofit organizations are eligible for the tax credit too, but the amount of the credit is limited to 25 percent of health insurance premiums. The credit will increase to 35 percent in 2014.
A small business with fewer than 50 employees will not face any penalties if it does not offer health insurance.