Delays give businesses time to prepare for new health care law

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Dayton Daily News reporters Randy Tucker and  Mary McCarty are taking a closer look at how the Affordable Care Act affects you. Our series answers frequently asked questions, as well as look at how the uninsured, self-employed, the health care industry and businesses are impacted by the changes.

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New health insurance marketplaces set to open for enrollment Tuesday will not only provide access to insurance for millions of Americans, they will also allow small business with fewer than 50 employees to buy insurance for their employees for the first time.

But many small business owners say they’re still in the dark about the rules governing the Small Business Health Options Program, or SHOP — created by the Patient Protection and Affordable Care Act — and they are afraid the law means they will be forced to buy insurance they can’t afford or pay a fine.

“We are not really sure how Obamacare is going to affect us, and it’s not clear how we are going to get answers,” said Dennis Summers, who owns Fire & Marine Inc., and is worried about possible rising costs to provide insurance for his 25 employees.

As with most small businesses, paying for insurance is a big part of the Springfield aluminum fabricating shop’s operating costs, and fluctuations in market costs could affect the margin between profit and loss.

“If it gets worse, that’s really scary,” Summers said. “There are no cut-and-dried answers. I wish there were.”

Such uncertainty is prevalent among most small business owners in the region, said Phil Parker, president and chief executive of the Dayton Area Chamber of Commerce.

Employers that do not offer insurance do not understand the requirements of the new health care law whether they apply to their business, and those that do offer insurance to their employees are tremendously afraid that their insurance premiums will skyrocket as a result of the law.

But no one can say for sure what the impact of the law will be until next year and beyond when it is fully implemented.

“People are calling and asking questions about what to do and what to tell their employees,” Parker said. “Right now, the only thing we can tell them that’s positive is if you have a traditional plan in effect right now, stay with it.”

While small businesses with 50 or fewer employees are eligible to enroll in SHOP, they are not required to offer health insurance under the law and those business that already offer insurance can choose to renew their existing health plans.

To join or pay penalty

But that does not necessarily mean they can avoid the impact of the health care law.

Even if a company is not required to provide insurance, the law will require that company’s employees to obtain insurance on their own or pay a penalty next year.

“People and businesses will need to know how to navigate through these exchanges or marketplaces,” Parker said. “Employers will need to know how to navigate them because what’s going to happen is the employees are going to come to their employer and say, ‘Hey. Help me out. You want us to all use this method, these exchanges, so how do I do that?’”

For those employers who do offer insurance, the impact of the health care law will vary depending on the size of their workforce and their health benefits.

Under the law, companies with 50 or more full-time workers will be required to offer health insurance or pay tax penalties, ranging from $2,000 to $3,000 per employee. The employer mandate was suppose to take effect next year, but the Obama administration has delayed the rule until 2015.

Still, some employers are already culling their workforces and paring full-time workers to part-time status to avoid the penalties. But the mandate is only part of the problem, since most big companies already offer health insurance to their employees.

Regardless of whether they have to comply with the mandate, employers large and small are likely to be face stiff price hikes for insurance premiums next year stemming from the law’s requirements that all plans offered inside and outside the marketplaces meet basic minimum coverage standards and guaranteed coverage to all, even those with pre-existing conditions and high medical costs.

James Lagos of Lagos & Lagos, a Springfield-based property management firm, said his insurance company — Blue Cross and Blue Shield — has already passed those increased medical costs onto him.

Lagos pays 100 percent of health premium costs for about 40 employees in the Dayton area and in South Carolina, even though the law does not require him to provide insurance..

He said his rates generally rise “in the single digits” each year. But this year his premiums spiked 14 percent.

“I thought I was always part of the solution by providing this benefit to my employees,” Lagos said. “Now my premiums are going to go up because of the actions of the federal government, and that hurts me.

“That’s money I could spend on something else,” he said.

Jim Kleingers, president and CEO of The Kleingers Group, a civil engineering firm with offices in Columbus, Dayton, Middletown and West Chester, is also concerned about premiums that were already increasing even before the health care law was passed.

“Our premiums were increasing every year, and we had to step down our offerings to fit our budget, while asking folks to pay a little more themselves,” said Kleingers.

Now the growing company, which has more than 60 employees and falls well within the realm of the employer mandate, is faced with even steeper increases in premiums, said Nancy Blaha, the company’s human resources manager.

“We are anticipating a fairly healthy increase, maybe double digits,” she said. “In the past, we have been fortunate to have single-digit increases.”

Blaha said The Kleingers Group is taking a wait-and-see attitude: “We are all patiently waiting to see what the landscape looks like when the plans are rolled out, and we’ll be reassessing all of our options for our employees.”