As a small business CEO, one of my most challenging annual decisions is what to do about our health insurance renewals. It’s always complicated, but the Affordable Care Act (ACA, also called “Obamacare”) has added some new wrinkles.
The opening of the ACA Health Insurance Marketplace last year was a tremendous boon for individuals seeking affordable coverage. Of the 44,000 Mainers who enrolled in a Marketplace plan, 90 percent got financial assistance that lowered premiums and limited out-of-pocket costs.
Small business is supposed to benefit from the ACA, too, so the Maine Health Access Foundation and several co-sponsors offered a series of ACA educational forums in September and October specifically designed to help small businesses understand the impact and their options through the ACA Small Business Health Options Program (SHOP) Marketplace.
As the forum moderator, I ticked up the pros and cons discussed by the experts and Marketplace insurers and concluded it’s a mixed bag on whether the ACA is a boon or bust for Maine small businesses. Videos of speakers from the forums are available at enroll207.com.
Here’s the upside:
— More insurance options: The ACA helped Maine get a new nonprofit insurer (Maine Community Health Options) so we now have more market competition.
— Tax credits: Businesses with fewer than 25 full-time equivalent employees can qualify for a small business tax credit of up to 50 percent (35 percent for nonprofits) to offset insurance costs on the SHOP Marketplace. To qualify, the business’ average annual wages must be less than $50,800 and the employer must contribute at least 50 percent to the health plan. However, I’ve heard of relatively few Maine businesses that benefited from the tax credit.
— Waiving minimum participation: Prior to the ACA, businesses could only offer a plan if enough employees participated to meet an insurer’s minimum participation requirement. Now, if there aren’t enough interested employees, a small employer could still sign up for a SHOP health plan, but only during the first month of open enrollment (Nov. 15, 2014, to Dec. 15, 2014).
— Employees can get a Marketplace plan with financial help under the right circumstances: Employees who don’t have access to an affordable health plan through their employer can purchase their own Marketplace plan. Based on family income, they may qualify for financial help that can lower premium and out-of-pocket costs.
— No-cost preventive care: Everyone agrees that health plans should be designed to help keep plan members healthy. The ACA mandates that plans must cover approved preventive screenings (mammograms, colonoscopies, etc.) at no cost to the consumer.
— Cap on out-of-pocket spending: Even with a health plan, consumers could be potentially liable for unlimited out-of-pocket costs. Under the ACA, out-of-pocket costs in any single plan year are now limited to $6,350 ($12,700 for families).
On the downside:
— For small businesses, plan premiums are still unpredictable: Insurers now calculate plan rates using each employee’s age, gender and smoking status. For businesses with a relatively young, nonsmoking workforce, premium increases are probably reasonable, but in businesses with older employees, premiums can still significantly increase.
— Erosion of benefits: Health plans have a responsibility to their shareholders to make sure the bottom line works out. To balance revenues and costs, plans continue to trend toward less coverage (more co-insurance) and more costs for the same or higher premiums even in the post-ACA era.
— Narrow networks: The ACA strives to improve quality and control costs by driving patients to higher-quality, lower-cost providers. Accordingly, Anthem has developed a narrow network plan for its individual coverage plans in southern Maine that excludes some major providers. Consumers are covered as long as they use in-network providers. Small businesses need to be aware that employees may face unexpected charges by out-of-network providers, even when they thought care was from an approved provider.
Reviewing the pros and cons makes it a tough call to tell if the ACA is helping Maine small businesses get more affordable and higher-quality coverage. For now, the jury’s still out.
Wendy J. Wolf is president and CEO of the Maine Health Access Foundation, which is Maine’s largest private nonprofit health philanthropy and a small business with 10 employees.