HELENA — Business owner Loren Davis provides health coverage for his 28-person workforce, and wants to keep them covered — but with the coming changes under the Affordable Care Act, he’s having a tough time deciding what to do.
“The most helpful thing would be for someone to come and tell me what would be the best for my employees and the business, but (my employees) have got to be covered,” said Davis, the owner of Davis Business Machines in Helena. “Everybody seems to have a little bit of knowledge, but nobody has the full knowledge.”
Davis’ predicament is like that of many small business owners in Montana: The rush of new laws and insurance regulations and a shifting market has them unsure of what steps they should take, in the best interest of their workers and their bottom line.
“Among small employers, the prevalent perspective is one of abject confusion,” said Jim Nys, a personnel consultant in Helena and owner of a temporary employee business. “They just don’t know what the rules are.”
For individuals, the new rules of the Affordable Care Act are relatively straightforward: You must purchase or already have health insurance by 2014, or pay a tax penalty.
For businesses, however, things get more complicated.
The law says businesses that employ more than 50 people must provide a health insurance plan for their workers in 2014, or pay penalties. But the rules on how to count your employees are anything but simple.
And don’t forget: The Obama administration postponed enforcement of that portion of the law until 2015.
Businesses with fewer than 50 workers aren’t required to provide coverage for their workers. But that doesn’t mean they’ll escape the effects of the new law.
They could choose to go to the new health insurance marketplace starting this week, and shop for group coverage for their workers — and get a tax credit to offset the cost of the plan, if they have 25 or fewer workers.
They could tell workers to buy individual policies on the marketplace, where some workers could get subsidies, making any policy cheaper than the business could provide them. Or, they could simply choose to do nothing, offer no health insurance for workers, and let employees figure it out on their own.
Nys, who owns Westaff and Personnel Plus, doesn’t think the “do nothing” approach is realistic.
He said workers without coverage and facing the mandate to get health insurance will be asking employers why they don’t provide it, or asking for guidance and assistance on how to get it.
“If you (as a business) don’t offer health insurance, I can see one of the things that can happen is, they’re going to ask for raises because they have to go out and buy (coverage) on the marketplace,” Nys said. “Or some of them will quit and go to work for someone who does offer health insurance.”
Several big employers in Montana — the state, NorthWestern Energy, large hospitals — said they don’t see the ACA affecting their employee health plans much at all, and aren’t planning major changes next year.
However, they say they’ll be watching to see how the ACA affects the overall health insurance market, with the advent of the marketplace and its offer of subsidized policies for individuals.
One possible effect is that some smaller employers who provide health coverage now may end the coverage and tell workers to buy subsidized coverage on the marketplace, beginning in 2014.
The Montana Health Co-op, a new health insurer offering policies on the marketplace, suggests on its website that businesses might be better off adopting that plan.
“All we’re really asking for is businesses to take a look at it,” said Jerry Dworak, CEO of the Health Co-op. “That’s all we’re trying to say — just run the numbers. I firmly believe that if this thing goes through to its conclusion, that health care will not be tied to employment. It’s a whole new world out there.”
But Webb Brown, president of the Montana Chamber of Commerce, said he’s not getting the sense that many Montana businesses will do that, and that they’d prefer to keep their employee coverage, if at all possible.
Still, he said the uncertainty created by the new law is rippling through the employment and insurance markets and could lead to many unexpected consequences.
For example, the chamber likely will end its Chamber Choices plan, which covers some 12,000 people by offering a collective plan to smaller businesses. Brown said the law no longer allows such a plan to give special benefits, because similar products must be priced the same.
“The whole premise (of the law) was that this was going to be a lot simpler in the future, and I don’t think it’s going to be any simpler,” he said. “You just can’t take something this complex and wave a wand and make it easy.”
Davis, the Helena business owner, said he’s been to several presentations on the new law but is still unsure what course to follow.
He wants to keep health insurance for his employees, but the cost keeps rising. He’d rather not tell employees to buy policies on the marketplace, because he doesn’t like the idea of subsidized insurance — but he doesn’t want to rule out something that might benefit him and his workers.
Nys said the key for business owners is to know the law as much as possible and find unbiased sources of information, ones who don’t have a political agenda.
“You should actually research the law to understand what it means to you, as opposed to relying on others’ interpretation of it,” he said. “Because for any given business, it can be great, or it can be horrible. But the things that make it great or horrible are individual for that business.”