By Jay Hancock
Mon, Dec 15 2014
For two decades Atlanta restaurant owner Jim Dunn offered a group health plan to his managers and helped pay for it. That ended Dec. 1, after the Affordable Care Act made him an offer he couldn’t refuse.
Health-law subsidies for workers to buy their own coverage combined with years of rising costs in the company plan made dropping the plan an obvious – though not easy – choice.
“I had a lot of regrets going into it,” Dunn, who owns three Italian Oven restaurants in suburban Atlanta, said of his decision. “I don’t think I have as many now — only because I’ve seen the affordability factor for my managers improve.”
Dunn and five managers are now covered under individual plans bought on healthcare.gov. How many other owners make the same decision will help set the future of small-business health insurance. Although the evidence so far is mixed, brokers expect more firms to follow in the next few years.
Companies like Dunn’s — those with fewer than 50 workers — provide medical coverage to roughly 20 million people. Unlike larger employers, they have no obligation under the health law to offer a plan. Now they often have good reason not to.
If employees qualify for government subsidies, like the managers who switched from Italian Oven’s corporate insurance to individual Obamacare coverage, everybody can win.
Owners don’t have to pay premiums, meaning they can give workers raises, invest in equipment or add to profits instead. And employee take-home pay can rise if subsidies — available even to families with middle-class incomes — are worth more than what a company was contributing.
Whether to cancel a company plan and let workers buy insurance on healthcare.gov or another online exchange “is something that I would say comes up in every conversation with a small-group” employer, said Adam Berkowitz, a consultant with Caravus, a benefits firm based in St. Louis.
“I just had another [small] business call in today and say, ‘You know, we can’t do it. We’re packing it in,’” said Roger Howell, head of Howell Benefit Services in Wilkes-Barre, Pa.
source : Small Businesses Drop Coverage As Health Law Offers Alternatives
