Small Business Owners Brace For 2016 Rate Shock
By Paul Swiech, The Pantagraph, Bloomington, Ill. |
For 2016? Mavec is hoping to avoid a head-on collision between his auto repair business and an expected acceleration of insurance premiums resulting from the federal Affordable Care Act (ACA).
Mavec, owner of Mike's Collision Center in
Small business owners, who were given a reprieve and are being allowed to renew health insurance plans for 2015 even if they aren't compliant with ACA, are bracing to be socked with substantial premium hikes in 2016.
"It's a nightmare," said
Only employers with 100 or more employees are required to provide them with health insurance under ACA, also known at "Obamacare," during 2015, Gilmore said.
Because small business owners were allowed to renew their plans for 2015, even if the plans aren't ACA-compliant, most are doing so, Gilmore said.
For example, of Benefit Planning's 300 or so small business clients, all but about five are renewing their 2014 plans, with average premium increases in the upper single digits, he said.
For Mavec, who is paying just under
"That's tolerable. That's expected. I can deal with that," he said.
But if he's required to switch to a plan for 2016 that complies with ACA, his premiums could increase 75 percent, he and Gilmore said.
"Seventy-five percent? Come on!" Mavec said. "That's unacceptable."
An irony for Mavec, a triathlete, is that his workforce is fit and healthy.
"We're a young, healthy group that submits few claims," he said. "I feel penalized that I have healthy employees and am subsidizing someone else's health care."
While Mavec's anticipated increase may be at the high end, many small businesses will face substantial premium hikes a year from now unless the law is changed, Gilmore said.
"Twelve months from now, there will be a lot of unhappy business owners out there," Gilmore said. "The majority of small businesses will pay considerably higher premiums under the ACA.
"The bottom line is we're (small business is) paying for people who don't have insurance," Gilmore said. "And most people who are working for large companies have no idea this is going on."
If the law isn't tweaked, what will Mavec do next year?
"I don't know," he said. "Either I don't provide insurance for my employees or I charge my employees more, or I provide (ACA-compliant) coverage and charge more for my services, which could make me uncompetitive."
Gilmore said,"It's great that we're helping some people get insurance, but it seems it could have been done in an easier way."
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