Most of us say "thanks" without thinking.
March 09--Kim Keuning is blunt in her assessment of the Affordable Care Act.
"I don't think it's a good law," said Keuning, the president of Out There Advertising in Duluth.
"I think that my voting will change as a result of this experience."
Keuning, who owns the firm with her husband, John, describes herself as a social liberal who has voted mostly for Democrats. But she holds the law, often referred to as Obamacare, responsible for a 32 percent increase in health insurance premiums that went into effect March 1 for her eight employees.
"I don't think that the law was written with the small business in mind," Keuning said.
President Barack Obama signed the Patient Protection and Affordable Care Act into law in March 2010, and some provisions have been in effect for three years or more. But for many, the law became a reality on Oct. 1, when health insurance marketplaces opened nationwide; and on Jan. 1, when the first policies purchased in the marketplace took effect.
The law was intended to make health care more affordable, more accessible and more effective for everyone, and included provisions for small businesses.
But how is it working for them so far? Interviews with several businesses across the region suggest a frustrating process that chews up time -- a valuable commodity among small business owners -- and offers less-than-stellar options. But some also believe the process will improve with time.
Small businesses in Minnesota and Wisconsin were adversely affected by a slow rollout, said Jeff Coenen of Johnson Insurance Consultants in Duluth.
Choosing an insurance plan through the Small Business Health Options Program (SHOP), the version of the exchange for small businesses, "has been very difficult and cumbersome," Coenen said.
Johnson Insurance has about 250 clients with 50 or fewer employees, Coenen said. Of that group, only one has gone through the exchange to purchase health insurance for its staff. And even with Coenen's help, it was a time-consuming process.
"It was a success, but it probably took about three months to get everything worked out, and thankfully they started early on in the process," Coenen said.
'A few bugs'
Neil Rolland, who was SHOP director through the end of February for MNsure, Minnesota's health exchange program, acknowledged "a few bugs" early on but said a decision to take paper applications as of mid-November made a positive difference.
"I think for all intents and purposes that process itself has gone pretty smoothly," Rolland said.
As of Feb. 26, 115 employers and 586 employees were enrolled in Minnesota's SHOP, according to the MNsure website. That's measured against a projection of 1,313 employers and 13,125 employees by the end of 2014.
Calls to local small businesses didn't yield any SHOP participants.
Trailfitters, an apparel store for active individuals in the Fitgers complex, has only two full-time employees and doesn't provide health insurance, said Bob Greenly, the store's president.
"The Obamacare legislation and MNsure have provided a level playing field for these employees to secure their health insurance on their own," Greenly said.
Ski Hut in Duluth offers group health insurance for its 12 full-time employees, owner Scott Neustel said. The business works through a local insurance agent and didn't use SHOP, he said.
Faced with a 28 percent premium increase, Ski Hut switched insurers from Health Partners to Medica, and by starting its new plan a month early it reduced the premium increase to 6 percent, Neustel said.
Arrowhead Regional Computing Consortium, which provides services to most of the school districts in a seven-county region, has 12 full-time and one part-time employee. The employees voted in June 2012 to terminate their group insurance plan because of a steep premium increase, said Cindy Lee Olson, ARCC director.
A majority of the employees chose coverage under their spouses' plans, said Denise Bohrer, controller for the consortium. The others "could all get comparable plans for less money being on an individual insurance plan," she said.
Small business choices
Although almost all individuals are mandated to have health insurance under the Affordable Care Act, businesses with fewer than 50 employees aren't required to offer insurance.
That gives small businesses choices, Coenen said. They can go through the SHOP exchange as a group. If they have a group plan, they can keep it, or they can discontinue their plan and let their employees shop on their own.
The latter often isn't a palatable option for small businesses in the Northland, he said.
"In the area that we live in, we're fortunate that on most days employers like their employees," Coenen said. "And they provide good benefits, and they want to attract and retain quality employees. One way to do that is to have a health plan."
That's the case for Out There Advertising, which has had a group health plan since it opened in 1997, Keuning said. Because she values recruiting and retaining good employees, she doesn't want to change that.
"My responsibility as a company owner is to look out for the best interests of my employees," she said. "And not just my employees but my clients -- for us to retain and recruit the best people and do great work for our clients because ultimately they're the people who pay for my health insurance."
Rolland said MNsure can offer small business an advantage by giving both employers and employees the advantage of a variety of plans from which to choose. "You can ... let your employees make the decision about what's the best for them in their household," he said.
It's far more than what a group could hope to offer on its own, he added.
Moreover, many small businesses are eligible for a tax credit if they shop through the exchange, Rolland said. It's available for all businesses with fewer than 25 employees and an average salary of $50,000 or less.
Employees sharing the cost
But Twila Brase, founder of the Minnesota-based Citizens' Council for Health Freedom, said the bottom line has been negatively affected for most small businesses.
"Two-thirds of the small businesses and the people in small businesses are going to see increases in their premiums," said Brase, who advocates free-market health insurance. "I think small businesses ... are contemplating whether it would not be less expensive for them to dump their employees into the government exchanges."
That's true even for businesses with 50 or more employees, who eventually will be penalized for not providing health insurance, she said.
For Keuning, dropping group health insurance wasn't an option. She didn't look closely at SHOP, either. Coenen, the firm's insurance consultant, checked it out and found that the prices would be about the same but the coverage not as good, she said.
But for the first time in its history, Out There Advertising is asking its employees to pay 20 percent of their health insurance premiums, Keuning said.
Other costs are rising as well, she said. The annual out-of-pocket maximum for an individual is increasing from $2,000 to $3,400 and from $6,500 to $6,800 for a family. But that includes a family of any size, so for a couple without children, the maximum rose from $4,000 to $6,800.
Even with employees sharing in paying the premium, the firm will feel the effect of the increase, Keuning said.
"How do I tell my clients, 'I'm sorry, I just got a bump up of 32 percent in my health insurance, so now I need to raise your prices'?" Keuning asked. "It's a pretty competitive business."
So Out There Advertising will have to watch its expenses, she said. Nonetheless, it's a successful business with loyal clients, and she said she's confident the health insurance changes won't seriously harm the business.
If a business were struggling, though, it could be a tipping point, Keuning said.
Coenen said the challenges are greater for his Wisconsin customers than for those in Minnesota. Wisconsin was hurt by its decision to go with the federal exchange rather than create its own as Minnesota did, he said.
But he's sanguine about the long-term future under the Affordable Care Act.
"We're all in this together, and so we're all going to pay into the pot to try to make it work correctly and hopefully slow the increase in health insurance costs in the long run," Coenen said. "But it's going to take a few years to get going. It's not going to happen overnight."
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