Businesses tout pros and cons of Affordable Health Care Act
House Republicans want the act defunded, something Democrats are unwilling to concede. When Democrats wouldn't budge, the House allowed the federal government to shut down.
Three years ago President Obama signed the Affordable Care Act into law, creating a mandate for employers with more than 50 full-time equivalent employees to provide insurance or be subject to penalties. It will also allow young adults to stay on their parents insurance until they're 26, provide subsidies for individuals who are up to 400 percent of the poverty level and work to lessen the cost gap between younger and older individuals.
The health insurance marketplace started open enrollment online Oct. 1. Companies were also required to notify their employees at that time that the six-month window to apply for marketplace insurance had opened.
The marketplace website has recently had some technical difficulties since its launch, but coverage on the plans is slated to begin Jan. 1.
But just how are Loudoun businesses affected by the act?
That depends on your business, says Jared Melvin, the Health & Life Director at Loudoun Insurance Group.
According to Melvin, the clients going through the most changes are small to mid-sized companies, because different provisions of the law deal with different numbers of employees.
"For some of those provisions small group is under 14 employees, some of them are under 50, some of them are under 100," Melvin said. "Employer-wise there is a problem figuring out which [provisions] apply, which ones don't," he said.
Another concern is that there may only be one person at a small business dealing with human resources. The added paperwork and pressure of explaining everything to new employees could take days to weeks over the course of a year away from their regular duties.
Several national franchises have already come out in opposition to the new act. Most notably Papa John's owner John Schnatter, who said his pizzas would cost between 11 and 14 cents more per pizza as a consequence of the new legislation.
The Affordable Healthcare Act "creates a competitive disadvantage for franchisees who do own more than one or two locations" according to a study commissioned by the Hudson Institute. The study listed employer mandates, a new regulatory burden and the incentive to downgrade full-time employees to part-time as reasons the act could create a disadvantage.
According to Melvin, larger corporations shouldn't need to overhaul the coverage they offer.
"The vast majority of employers that are offering group insurance right now aren't affected by the act," said Melvin. "The vast majority of companies are already offering affordable coverage." In fact all of the companies he works with already offer affordable coverage, as defined by the Affordable Care Act.
Only 0.2 percent of the businesses in the U.S. with more than 50 employees do not already provide healthcare insurance to full-time employees, according to Forbes.com.
Another segment of the business community that's likely to see little change is businesses with a highly- skilled workforce.
"I pay 100 percent of my company's healthcare," said Craig Smith, the CEO of Voodoo Lunchbox, a company that provides analytics, cloud services and software infrastructure for businesses. "But I deal with different margins, different points of sale."
Smith said he and co-founder Spencer Pingry thought "long and hard about quality of life" when they were planning on how to start the company.
Businesses like Voodoo Lunchbox with employees who have specific skills already offer health care because it is necessary to recruit new talent and retain employees.
Certain businesses with a small group plan are most likely to be positively effected by the bill. Instead of a few members of the small group with high medical costs raising the price for everyone, group rates will be evened out across small group plans.
Some companies might even be able to start offering insurance.
According to Melvin, the act will work to make small groups have a more standard rate, instead of each group rate being dictated by the medical conditions of the members in that group.
One caveat Melvin had for individuals hoping to get subsidized coverage on the market is that certain individuals will qualify for subsidized plans, but won't be eligible if they're offered a group plan through their employer because the employer plan is already being subsidized.
In the end, the bill effects each company differently, and can help or hamper production.