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Healthcare Reform: Business Confusion

Updated: Thursday, September 12 2013, 10:53 AM EDT
Were just weeks away from the next major step for health care reform.

On October first the insurance landscape changes dramatically when the so called "health care exchanges" open as part of the Affordable Care Act.   They require individuals without coverage or the under insured to buy insurance or face penalties.

If it sounds confusing to you, it's not any easier for small businesses.
McHale's events and catering is a family business, Chuck McHale is third generation and he's proud of the health benefits offered to full time employees. But he's wondering what the affordable care act will mean to his bottom line.

Chuck McHale, owner McHales catering, "so many unknowns until October first and the exchanges and we see more rates then more educated on where we need to go."

To make matters more confusing the employer mandate to provide health insurance with 50 or more full time workers was delayed a year. Yet individuals without health insurance will pay a penalty beginning in January, the individual mandate was not delayed.

Jack Neu, employee, "uncertainty is probably the best way to describe how I feel right now."

Jack Neu says that as an employee at a company with 22 workers offered health insurance. He understands what the president of K-4 Architecture and Design is facing.

Jack Klump, President of K-4, "our concern is it may get to the point it's going to be hard to compete with the benefits in the exchanges."

In other words the health plans now offered employees might cost more than what individuals can buy on their own in an exchange .  So does he then offer money to employees so they can buy their own coverage?

Another factor for McHales' they don't always have 50 workers, they have a lot of seasonal workers. Going forward Obamacare is a consideration, "it looks like it's easier if we stay under 50 and don't fall under the regulations, it's not that we don't want to grow, but we're keeping a close eye on it."

Matt Davis, Cincinnati USA Regional Chamber, "uncertainty around health care has surpassed economic uncertainty about the economy as one of the number one issues for employers."

The chamber of commerce perspective is the affordable care act isn't good for an economy that's recovering but struggling.

Just to reinforce how confusing this is for small business, the u.S. Chamber of commerce found 30 percent of small businesses are ready for the employer mandate, 44 percent are not and 26 percent don't even know what's required.

John Venturella, Clark Schaefer Hackett, "and uncertainty in our mind and any body's mind doesn't bode well for moving forward."

John Venturella was among a handful of CPA's invited to Washington to talk to the assistant treasurer for tax policy. He told him companies across the country are pausing with their 3 - 5 year strategies, "because they don't really understand or know how this law is going to affect their bottom line."

Venturella was told companies should treat the next year as a practice year and chose the benefits they need to keep a competitive work force. That's why the companies we met do offer benefits, "we take a lot of pride in our compensation package."

And they're not saying they're against the coming changes, "see how it plays out it's just so confusing.".

And concern at McHales with a young pool of workers they could see rates jump 20 - 30 percent  as insurers accept more older workers who are less healthy.

The u.S. Chamber of commerce also found half of small businesses surveyed plan to reduce their workforce or cut employee hours to avoid the mandate in 2015. Healthcare Reform: Business Confusion


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