Small Business Faces Difficult Obamacare Decision

 Things for Small Businesses to Know

  • Business owners with 50 or fewer full-time equivalent employees can participate in the Small Business Health Options Program (SHOP) Marketplace
  • The SHOP Marketplace opens January 1, 2014
  • Small businesses can receive a tax credit worth up to 50 percent of their contribution toward the employee's premium cost
  • Employers with 50 or fewer FTE are not required to offer insurance and will not face a penalty if they don't

More expansive and more comprehensive health insurance policies, mandated by the 2010 Affordable Care Act -- informally known as Obamacare -- are making it tougher for some small businesses to provide those policies, according to business owners.

"It made insurance so expensive," said Gregory Walker, in reference to the ten Essential Health Benefits, that must be covered by any plan.

Walker owns the Modern Machine Tool Company in Jackson, which manufactures auto parts.

"Everyone in here ended up having to take money out of their own pocket to get their health insurance," he said. "And this year there's taxes and fees going onto their insurance, which are going to further drive up their costs."

Walker has 29 employees, which means he isn't required to offer an insurance plan. But he says offering a plan helps him attract the best workers available.

"I have a highly skilled workforce in here; they build these machines from scratch basically," he said. "Without benefits, I don't think I could hold onto them. I mean, these are the kind of jobs that you want."

The size of Walker's business also makes it eligible for federal tax credits and allows him the option of pushing his employees to the federal healthcare marketplace, where individuals can compare plans side-by-side. But Walker said no matter the means, the ends are the same: expensive.

Premiums have jumped 24.5 percent in the last year, Walker said. As a result, he's considering dropping coverage -- something the company hasn't done since the 1940s.

The Jackson County Chamber of Commerce says Walker's story isn't an outlier.

"We are hearing a lot of frustration and concern from our businesses in Jackson County and beyond," said Mindy Bradish-Orta, president of the Chamber. "There's a lot of uncertainty, and that's fearful. And so the businesses are having to choose. Do we cut some hours, to make more part time people? Do we cut wages so that people qualify for Medicaid? Or do we just send everyone to the exchange and pay the fees and penalties?"

Local healthcare navigators -- the people trained to help you through the website -- say the best thing businesses can do is explore all their options, including a special marketplace just for them.

"Get on [the website], find out what you're eligible for," said Danielle Carpenter, the regional lead navigator in the Jackson area. "Because you don't know, it might be more cost-effective going through the shop marketplace, it might be more cost-effective having the individual employees going through the individual marketplace itself."

But Carpenter concedes that not everyone will find a cheaper option than before.

"Unfortunately it's not going to help everyone," she said. "It was made to help the majority though, so there are going to be people that fall through the cracks, businesses that fall through the cracks unfortunately. But hopefully with the options out there, one will suit them better than none."

Many businesses are relying on so-called "Band-Aid" plans, Bradish-Orta said, grandfathering in their current plans in hopes that when those plans do finally expire, there will be some clearer answers and alternatives.

That's more or less the approach Gregory Walker has taken at the Modern Machine Tool Company. Walker said he plans to wait until his plan expires in six months and evaluate from there.

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