Mid-Size Businesses To Reconsider Health Plans Under Affordable Care Act

NJ Spotlight News | January 1, 2014 | Health Care
Business owners nationwide are now considering their health care plan options.

By Dari Kotzker

Employers nationwide will now have some decisions to make regarding their company’s health plans under the Affordable Care Act – and some aren’t happy about it.
“Insurance companies are not going to take it on the chin, they’ve been in business for a long time and whatever it’s going to cost to administer this, they’re going to move it along to companies like us,” said Bill Goodwin, President of Griffth Electric Supply.

“Actuaries in the government have estimated the impact on premium to be about three percent, so it’s new for the Affordable Care Act premium tax, that kicks in in 2014,” said Wardell Sanders of New Jersey Association of Health Plans.
Hit hard, mid-size businesses with 50 or more employees, Goodwin’s president of Griffith Electric Supply — with 52 employees. He provides health insurance for his employees and in preparation for Obamacare, made some policy changes back in August. 
“We were contributing 75 percent of our employees coverage whether they were single, two party or family and we’ve cut that back to 50 percent knowing that we were seeing some increases,” said Goodwin.
These mid-sized companies now have a responsibility to offer coverage and if they don’t, they may face penalties. However, those penalties have been delayed one year to 2015.
“The penalty is $2,000 per year, per worker, the cost of insurance could be substantially more,” said Jack Mozloom, regional media director at national Federation of Independent Business. “What we’re concerned about is that many employers are going to be confronted with a terrible choice of whether to pay more for the Obamacare version of insurance in which case they may be financially unable to do it or discontinue insurance all together for their workers.”
“We’ve heard that before and so far we have not seen a trend in this area,” said Raymond Castro, Senior Policy Analyst at New Jersey Policy Perspective.”There may be employers that do decide to do this, but there were employers that did this before as well, health care costs were going up even faster before Obamacare care got started.”
But workers advocates say the Affordable Care Act is a win-win for employees.
“If you have insurance with an employer now, chances are you’re going to be getting even better insurance and if you don’t have insurance or for some reason they drop insurance you’re always eligible to obtain insurance in the exchange,” said Castro.
As for Goodwin he may have to reconsider some of his healthcare options once his insurance plans are up for renewal in August.  One option – reduce his workforce to evade the new guidelines.

“Do we try to get under 50 people and avoid the act all together, from what I understand and what we’ve seen so far, there’s going to be a lot of administrative end to it so it’s going to cost the company money. Right now its a wait and see,” said Goodwin.

Goodwin is hopeful Washington will still change some of these regulations.