Owners and employees of small businesses in Maine face challenges and opportunities as a result of the federal health reform legislation signed into law on Tuesday. Experts are still analyzing the specific effects of the legislation and additional changes are included in a reconciliation package still pending in the Senate, but some measures will go into effect this year.
“We don’t know all the details yet,” said Trish Riley, director of Gov. John Baldacci’s Office of Health Policy and Finance. “But these things are in the law and they provide opportunities to small businesses in Maine.”
About 34,000 of Maine’s smallest businesses will qualify for tax subsidies in 2010 if they provide health insurance for their workers, Riley said Tuesday. Companies with 25 or fewer employees and an average work force wage of $50,000 a year or less could get a federal tax credit of up to 35 percent of the cost of premiums in 2010, and up to 50 percent of premiums in 2014. The amount of the tax credit shrinks as the size of the company’s work force and average wage increase.
Beginning in 2014, the law requires virtually all Americans to purchase private insurance if they do not qualify for government coverage such as Medicare or Medicaid. Businesses with 50 or more employees will have to offer insurance to their workers beginning in 2014.
Companies with fewer than 50 employees will not be required to offer coverage, but will be charged an annual fee of up to $2,000 per full-time worker if any of their employees take advantage of government-subsidized plans offered through state-administered insurance exchange programs that will go into effect in 2014.
According to Joel Allumbaugh, president of the Maine Association of Health Underwriters, insurance agents in Maine have fielded dozens of calls already this week from worried business owners wondering how the federal legislation will affect their bottom lines.
“Quite frankly, it’s hard to give them definitive answers,” he said. “We’ll need to wait to see how it fleshes out and is implemented.”
Allumbaugh said most small businesses are already doing the best they can to provide their workers with affordable health care coverage. For many, he said, that coverage takes the form of high-deductible “catastrophic coverage” plans. Such plans will not fulfill coverage mandates for most people beginning in 2014.
“Employers are already doing as much as they can with limited resources,” he said. “There is a lot they’re going to have to think about and worry about, and in a lot of cases, this [new law] is going to increase their costs.”
Democratic U.S. Rep. Michael Michaud of Maine’s 2nd District voted for the health care overhaul last Sunday, along with his 1st District counterpart, Rep. Chellie Pingree.
On Tuesday, Michaud and Pingree attended the White House signing ceremony for the bill, along with state Sen. Sharon Treat, D-Hallowell, long a proponent of health care reform at the national level.
In a prepared statement on Tuesday, Michaud said the measure, while imperfect, is a step in the right direction.
In addition to providing tax incentives for small businesses, Michaud said, the bill will improve services provided through the Medicare program for seniors, increase funding for community health centers, require insurance companies to allow young adults to stay on their parents’ policies up to their 26th birthday, and ban annual and lifetime caps on health insurance benefits.
Maine’s Republican U.S. senators, Susan Collins and Olympia Snowe, both voted against the reform legislation for reasons that included concerns about its impact on business and the country’s struggling economy.