Some Small Businesses See Obamacare as Welcome Relief
The legal fight against "Obamacare" was led by a group describing itself as the United States’ “leading small business association,” and many of those worried or angry about the health reform law are entrepreneurs concerned that it will limit growth or even threaten their small businesses’ existence.
That doesn’t mean, however, that small businesses uniformly oppose the Patient Protection and Affordable Care Act, which, as of January 2014, will require most Americans to obtain health insurance and potentially impose hefty fees on many companies that don’t offer their employees coverage.
The National Federation of Independent Business put its name to the Supreme Court case that unsuccessfully sought to overturn the health reform law. The NFIB, which has been hosting webinars on the nuts and bolts of the new law, contends that Obamacare is a “job-killer” that won’t restrain skyrocketing premiums that have burdened small business for the past decade.
Some other small-business groups, however, have vocally supported the ACA and are trying to shape its implementation, as they expect it to significantly help both companies and employees. The groups, for example, are resisting an Obama administration proposal to delay a key provision of the law that would allow small-business employees to choose from multiple plans on state-based exchanges, or marketplaces.
Under the health reform law, employers with the equivalent of 50 or more full-time workers could face fines if they don’t provide full-timers with affordable coverage that meets government standards as of the first of next year. Those with fewer than 50 full-time workers won’t face those requirements and will have the chance to sign up for plans in new state-based marketplaces and, in some cases, receive tax credits for offering coverage.
As recently as February, an NFIB senior vice president, Susan Eckerly, wrote to support lawmakers aiming to repeal Obamacare’s key employer requirements. “It is already hurting employees by forcing small business owners to reduce hours and cut jobs in order to sustain their businesses,” she said.
NFIB also is pushing for repeal of a new health insurance tax in the law that it estimates will cost 146,000 to 262,000 private-sector jobs and cut $19 billion to $35 billion in sales by 2022.
Small-business supporters of the healthcare law, however, consider the ACA a lifeline.
In testimony prepared for a South Carolina Senate panel hearing in February, Frank Knapp Jr., president and CEO of the South Carolina Small Business Chamber of Commerce, noted that when he co-founded the organization in 2000, “small businesses were begging for more affordable health insurance and health care.”
The Affordable Care Act “was the compromise solution to the demands of businesses to get health insurance and healthcare costs under control. And the law does,” Knapp continued, adding that Obamacare already has resulted in health-coverage tax credits for businesses with fewer than 25 employees while shielding 97% of small businesses from any penalty for not providing group insurance.
Knapp also said South Carolina small businesses were refunded $4.3 million from insurers last year under an ACA provision that requires at least 80% of small-business premium dollars to be used for medical and related expenses.
A national group, the Small Business Majority, also backs the law. In testimony submitted to the House Energy and Commerce Committee in March, Mike Brey, a member of the Small Business Majority’s network council, said he looked forward to the ACA relieving the burden of rising costs that he and his toy-store employees have seen in recent years.
Brey blamed “misinformation and myths” for the discontent about Obamacare among some small-business owners.
“While my business has been successful and we’ve been able to grow, the ability to keep my workers happy and secure by providing health insurance coverage has eroded,” Brey said, citing premiums that have tripled over the years and rising employee out-of-pocket costs.
“My workers are burdened by high deductibles and are putting off preventive care for themselves and their children and avoiding the doctor," he said. Heath reform "was the first thing in years that gave me hope that this spiral of escalating costs and depreciating quality of coverage might finally end."
A Small Business Majority-commissioned study by MIT economist Jonathan Gruber found that without health reform, small employers would pay $2.4 trillion in healthcare expenses by 2018, which would have cost 178,000 jobs, $834 billion in small business wages and $52.1 billion in profits.
Meanwhile, the organization recently joined several other groups, including Silicon Valley Leadership Group, the Manhattan Chamber of Commerce and the American Booksellers Association, in opposing the government proposal that would allow states an extra year to set up multiple plans on insurance exchanges. The proposal, which also would delay “employee choice” provisions in the 33 states with exchanges run by the federal government, is not final yet; the Department of Health and Human Services must review public comments received in recent weeks and likely will make a final decision in two or three months.
The government says the delay is needed as a transitional period. If it is approved, only one health plan would be available in 2014 to employees on affected exchanges, although employers could select that plan from a choice of several carriers.
Knapp, of the South Carolina Small Business Chamber of Commerce, which opposes the delay, said competitive state-based exchanges are “something that we were selling as a benefit of the Affordable Care Act." Small businesses would be disappointed if that feature weren’t going to happen right away, he said.