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Small businesses get some relief from health care law

Is it possible that policy is already being influenced by the large group (33) of small business owners who will take seats in Congress next January? After all, they are the largest and most outspoken contingent of small business persons ever elected in a midterm. In contrast, two years ago only 11 small business owners won election.

Advance influence or not, the Department of Health and Human Services announced this week itís loosening up on a new health care rule to allow employers to switch insurance carriers without having to meet certain new coverage requirements. The unexpected change will now allow employers to keep their grandfathered status even if they switch plans, as long as they don’t significantly cut benefits or increase costs for the employees.

More specifically, the new health care law requires most insurance plans to provide free preventive care and gives enrollees more power to appeal coverage denials. But that pushes small businesses into a real dilemma: pay much higher premiums to keep their current plan or switch to a possible lower-cost plan.

However, in the latter case, the new plan would have to include all the required new benefits and that would cancel out the reason for changing – lower cost. Moreover, by not allowing employers to change plans and maintain their grandfather status, the administration was really killing competition and handing the insurance industry a rate-increase hammer!

 

The change does not apply to large employers. And, small businesses should still proceed cautiously. The new guidelines specify that an employer can lose the grandfather status if employee co-payments are increased by more than $5 or the deductibles are increased more than 15 percent. Also, if the percentage of premium paid by the employee is increased more than 5 percent, the employer would lose the grandfather status. Obviously, time with your insurance provider will be well spent.

 

And, in case youíre wondering, the 33 small business owners elected to Congress are all Republicans. One will be a Senator from Wisconsin. Thirty-two go into the House. Thirty-two are men, one woman. Reportedly, 14 of them have never held an elective office. Finally, three House races with small business candidates are still undecided.

Comments

4 comments on “Small businesses get some relief from health care law

  1. korn

    This has absolutely nothing to do with this subject Norm, but just want to say “congrats” on your boating industry award as it relates to this here boating blog of yours… Good show, old man… I even used as my latest News-Herald outdoors blog, though I had to fuse it with information regarding the up-coming firearms deer-hunting season…

  2. Fred DeFinis

    Small business must be cautious indeed. Here in Massachusetts we have Romneycare which is the little brother of Obamacare. The smallest annual premium our small business has had is 13% and the largest is 29%. Premiums have doubled in five years, with most of that coming after the “reform”.

    The government funded or subsidized plans for low income earners have had very small premium increases. Large employers have also had more modest increases. In both cases, these entities have greater purchasing power and can push back on the insurers and providers. Small business is left to shoulder most of the increases.

    People in other parts of the country are about to find out that there are substantial costs to the new mandates. Mandatory Rx coverage, covering “kids” until 26 years of age and similar provisions drive the costs up for everyone, but especially the small business. A middle-of-the-road family plan in MA costs $15-18k per year. Those of you in other locations would be smart to plan ahead.

  3. BillW

    So Norm what you are saying is that it is good that preventive care is discouraged an not be “free” and that coverage denial appeals be harder? How about recinding child labor laws too!

  4. Curtis

    I do not know who is benifitting but I just got my re-newal info and my rates are going up another 36%. Looks like we will be dropping health care from the business. We will let everyone go on the state program. Have a nice day

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