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Date published: 2/10/2013
BY JIM HALL
Some local business leaders seem hesitant to say it, as if the federal government could issue a ruling at any moment that puts them back in the soup.
But they've studied the Affordable Care Act. They've heard presentations by insurance experts, viewed Web seminars and been briefed by their human resources people.
After all of that, they're thinking that maybe, just maybe, the new law won't hurt them so badly after all.
As Matthew Simmons, president of the Capital Ale House restaurant chain, put it, "We're in a really good position for this changeover. We're pretty much compliant."
Of course, the law is complicated, and much is still unknown. Individuals and some local business owners have not been spared. They face penalties if they don't meet its requirements.
"It's going to have a major effect on our business," said Karl Karch, owner of Home Instead Senior Care.
Yet two groups of employers--the small ones that employ fewer than 50 people, and the big ones that already offer comprehensive health plans--have escaped the initial fines that are a feature of the act.
SMALL FIRMS EXEMPT
The law encourages businesses to offer health insurance to their workers. And in some cases, it fines those that don't.
But it exempts those with fewer than 50 workers. (Actually, it uses a formula that combines full- and part-time workers and calls them full-time equivalents.)
Those who employ 50 or more of these full-time equivalents face fines if they don't offer health coverage. The fines will kick in if their workers qualify for government subsidies to help them buy coverage on the online insurance marketplaces that will open later this year.
Even if they do offer coverage, employer's plans must be affordable and sufficient, according to rules that the government is still drafting. If not, employers could face fines.
Business owners are trying to make sense of all this.
"That piece of legislation was some 900 pages, and we're still trying to get our arms around it," said Kent Farmer, president and chief executive officer of Rappahannock Electric Cooperative.
Affordable, according to the law, means that the employees' share of their health insurance premium is no more than 9.5 percent of their adjusted gross income.
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The Affordable Care Act has its critics, yet some local business leaders describe themselves as supporters. They include: Kevin Dillard, president, LifeCare Medical Transports: "We firmly believe that everybody ought to have access to health care. The line of business that we're in, we way too often see people who have fallen through the cracks and have not received appropriate care." Matthew Simmons, president, Capital Ale House: "Looking back over the years, we've always had large increases in [insurance] rates. The last two years [because of the act] we've had the smallest increases ever."
Government-sponsored online insurance markets will open later this year. Will local businesses drop coverage for their workers and tell them to buy individual plans on these markets? Several said they won't:
Lloyd Harrison, president and chief operating officer, Virginia Partners Bank: "We need to be competitive for employees. The other thing is more philosophical. We want to do what we think is the right thing for our employees." Kent Farmer, president and chief executive officer, Rappahannock Electric Cooperative: "Our benefits package is a very important part of our overall compensation program. Our employees are protective of it." Paul Scott, president, Scott Insurance & Financial Services: "Many employers will try to keep their health insurance at all costs."
Some local businesses don't fear the penalties that occur when their employees get relief on a government-sponsored exchange. Instead, they fear the 2018 tax that will be imposed on high-cost health plans, the "Cadillac" plans, valued at more than $10,200 a year for an individual:
Lloyd Harrison, Virginia Partners Bank: "It's not far-fetched to imagine a point where our existing plan starts pushing up against that $10,200 limit." Kent Farmer, VEC: "Unfortunately, we may be in a group that gets defined as a Cadillac plan. It doesn't take much." Paul Scott, Scott Insurance: "It could be a race to the bottom," with employers offering only the minimum-required coverage. CHANGING COVERAGE is an occasional series about the 2010 Affordable Care Act and the reforms under way.
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