Story originally appeared on the Detroit News.
Auburn Hills business owner Bill Kittle still isn’t sure how the federal law will impact his small company.
“I’m looking for the complete idiot’s guide to the affordable care act,” said Kittle, whose company tracks the fiscal health of local governments and school districts and employs a handful of full- and part-time workers.
The owner of Munetrix is typical of Michigan’s 800,564 small business owners. Many are still in the dark about the rules and requirements of federal health care reform, also known as Obamacare or the Affordable Care Act, and how it will impact their bottom line, according to business leaders, insurance officials and independent agents interviewed by The Detroit News this week.
“Most small employers haven’t really grasped it yet,” said Joe DiCresce, vice president of Brown and Brown, a Detroit-based independent insurance agency. “A lot of them have tried not to pay attention to it until they really had to, and now they’re being forced to pay attention to it.”
The health insurance law hopes to add millions of Americans to insurance rolls through a combination of reforms, including added responsibility on individuals and businesses, and expanded Medicaid.
Although various components have been implemented, the Obama administration has postponed an employer mandate until 2015. That will require businesses with 50 or more employees to provide comprehensive insurance to their workers. All individuals, however, must have insurance by Jan. 1. That includes employees waiting for their firms to meet the federal requirement by 2015.
But business owners still face a litany of requirements, such as notifying their employees by Oct. 1 about the Michigan health insurance exchange.
Many independent business owners have found themselves too busy cutting hair, fixing cars, stocking shelves or providing consulting services to get up to speed on the complex Affordable Care Act, said Charlie Owens, state director of the National Federation of Independent Business in Michigan. “Every minute, every hour they’re spending on this, they’re not growing their business,” Owens said. “No one got in business to administer the Affordable Care Act.”
Jane Johnson, president of Rochester Hills-based Osco Inc., which designs and manufactures injection molding systems for the plastics industry, said she’s tried to stay on top of law, but that’s been difficult because of the many regulation changes handed down by the Obama administration. “Even though you have plenty of access to information, it keeps changing,” Johnson said.
There’s also a lot of misinformation circulating in the business community, Owens said.
“There’s a big void between what they think they know, and what they actually know,” said Owens, who’s been trying to get his 10,000 Michigan members of the National Federation of Independent Businesses up to speed. “A lot of them read about the change in the employee mandate and they think they don’t need to know anything for a year — that’s not the case.” Owens said there are many things businesses need to know now.
Employers, for example, are required to provide each employee with a notice by Oct. 1 informing them about Michigan’s health insurance exchange. Businesses also should know that after January, the waiting period for workers to qualify for company-sponsored health insurance can’t be longer than 90 days.
On the up side, owners with fewer than 10 employees could qualify for tax credits equaling up to 50 percent of insurance costs if they choose to buy policies for their workers.
Business organizations and health insurers, including Blue Cross Blue Shield of Michigan, have been holding workshops on the law, and the Small Business Association of Michigan has launched a service, ACANotice.com, to help small businesses mail out notices about the health exchange to their workers.
John Dunn, vice president of middle- and small-group business for Blue Cross Blue Shield of Michigan, said hundreds of business owners have attended his workshops.
“A lot of small employers didn’t realize if you are a small employer (with fewer than 50 employees), you are not subject to the employer mandate” to provide insurance or pay a penalty, “and if they don’t give notice (about the health insurance exchange), they will be subject to fines,” Dunn said. “The last big area is we try to educate them in is how their (insurance policies) are going to be priced.”
Costs will go up
Amid all the uncertainty about the law, there is one thing employers with 50 or more employees know for sure. They’re going to pay more — and for Johnson, that presents an agonizing dilemma.
“Years ago, we paid 100 percent of our health care for everyone, whether it was for a family or a single,” said Johnson, who employs 35 workers at Osco. “We still pay 65 or 70 percent.
“I suspect we’ll be forced to make some sort of alterations, but we always want to take care of our employees. We’re not ones to say ‘Just go to the exchange,’ so we’re really going to have to struggle with our decision. We’re kind of a family here and it’s important to us.”
Milan Gandhi, vice president of Med-Share Inc., a Southfield a diagnostic imaging provider, said the Affordable Care Act will be good for business — more people will have insurance to pay for medical tests. The company has five imaging centers and 40 mobile imaging units.
But with 90 full-time employees, the company’s health insurance costs also will increase — by about $2,000 per employee. It would be cheaper to give workers a $4,000 stipend to buy their insurance on the health exchange, but that’s an option the company won’t consider.
“We’ll find a way (to afford health insurance) because it’s important to us,” Gandhi said. “But it’s a strain for sure on our company, and that doesn’t matter what industry we’re in.”