Summit County small business owners will soon have to do some shopping of their own, purchasing health insurance under a new federal law that rolls out today.
The Affordable Care Act, commonly referred to as “Obamacare,” is a way for small businesses to get new, less-expensive sources of insurance through health exchanges.
The law creates the Small Business Health Options Program, or SHOP, which is a part of each state’s health insurance marketplace. Connect for Health Colorado is the state’s marketplace, an online insurance shopping center where individuals and businesses can browse, compare and choose plans, similar to how Expedia works for travel. Small businesses with less than 50 full-time employees can shop for group health plans beginning today, Tuesday, Oct. 1.
Dick Carleton, owner of the Hearthstone Restaurant and Mi Casa in Breckenridge, said he is holding an all-staff meeting later this week to educate his team members about the new marketplace. Carleton has more than 50 employees, but he already offers health insurance for his employees.
“There are some great opportunities for part-time or seasonal employees through the marketplace,” he said. “In the long run, the work force in Summit County — the lifeblood of our community — will be better for it.”
As of 2010, 97 percent of small businesses had fewer than 50 employees, according to the U.S. Census. Of companies with more than 50 workers, 96 percent already offer health plans, government data shows. The U.S. Census Bureau says 15 percent of Americans don’t have insurance at all.
Small businesses with more than the equivalent of 50 full-time employees with average annual wages above $250,000 must provide health coverage to those employees beginning in 2015 or face fines of $2,000 per employee. This employer mandate applies to approximately 3 percent of America’s small businesses.
Ken Nelson is president of the Breckenridge Restaurant Association and owns three restaurants in town, including the Briar Rose. He said his business, with more than 50 employees, will have to offer health insurance by 2015 or face those fines.
“It’s going to be very expensive for businesses to offer it,” Nelson said. “Given the economic climate over the last few years, most businesses don’t have a lot of room to recoup some of those costs.”
On the market
The Connect for Health Colorado marketplace will provide small group plan options to Colorado employers with two to 50 employees. Six carriers have so far filed to provide small group plans through the marketplace. In Summit County, that includes: Anthem Blue Cross and Blue Shield/HMO Colorado, Colorado HealthOP, Kaiser Permanente, Rocky Mountain Health Plans and SeeChange Health.
The website allows individuals and business owners to browse for these insurance plans anonymously. Ben Davis from Connect for Health Colorado said there are currently 100 total plans from 10 insurance companies participating.
He said, much like travel websites, Coloradans can browse different options fitting their specific family sizes, incomes and locations.
“Our state exchange was built with Colorado in mind,” Davis said. “We’re the local storefront compared to the national chain.”
Health insurance prices depend on where location, age, family size and if an individual uses tobacco. Nearly 500,000 Coloradans will be eligible for a new kind of tax credit to reduce monthly premiums and some Coloradans will be eligible for zero-premium health plans. People can also get help accessing free or low-cost coverage through Medicaid or Child Health Plan Plus.
“Our health care and insurance in our country is terribly broken,” Carleton said. “This isn’t a perfect law but it’s going to force change. I’m OK investing a little more if that moves the needle.”
Small businesses with less than 25 full-time employees with average annual wages below $50,000 can also get tax credits to help pay for employee premiums.
For those small businesses, employers can use the exchange’s assistance guides to help employees shop for an affordable plan and can tell the exchange how much premium help each employee will get. Employers have to pay at least half of the cost for insuring each employee.
“Every service the exchange is going to offer will be available Oct. 1,” Davis said.
Robert Murphy, Family & Intercultural Resource Center community support manager, said his organization is just one of many in Summit County ready to help people navigate the new system.
“This is a community with a lot of small businesses, a lot of people who are self-employed and it’s an expensive community to live in and that makes it challenging to successfully operate a business and it makes insurance even more difficult,” he said.
For many small business owners in Summit County, whether they have less than 50 employees or not, the changes to the health care system are still confusing and difficult to understand.
“Unfortunately it’s taking a considerable amount of time to facilitate all of this from a business standpoint,” Nelson said. “A lot of businesses right now just want to see how everything pans out,” he said.
Coverage purchased through Connect for Health Colorado can start as early as Jan. 1, 2014. The deadline to purchase coverage that will begin then is December 15.
“In our market, most small businesses fall under the 50 full-time employee mark,” Nelson said. “But for the portion of us that are going to have to purchase something, we’re cautiously observant of what’s going on.”
In 2014, most people will be required to have health insurance, and those without insurance will have to pay a penalty — $95 per adult and $47.50 per child, up to $285 for a family, or 1 percent of family income, whichever is greater. People with very low incomes and others may be eligible for waivers from the penalty.
“It’s expensive under any circumstances to pay for health insurance,” Murphy said. “But the risk you take by not having coverage is just not worth it. The speed at which those bills can rack up is scary.”
Affordable Care act Timeline
Oct. 1, 2013: Open enrollment begins. Individuals and small businesses in all 50 states and the District of Columbia can shop for insurance on the newly created health insurance exchanges, such as Connect for Health Colorado.
Dec. 15, 2013: Deadline to purchase coverage that will begin in January.
Jan. 1, 2014: Coverage begins. Most people will be required to have health insurance, and those without insurance will have to pay a penalty. In 2014, the penalty will be $95 per adult and $47.50 per child, up to $285 for a family, or one percent of family income, whichever is greater. People with very low incomes and others may be eligible for waivers from the penalty.
March 31, 2014: Open enrollment closes.
Oct. 1, 2014: Open enrollment opens.
Jan. 1, 2015: Businesses with 50 or more workers must provide health benefits or pay fines of $2,000 per employee. The penalty for people who do not purchase health care insurance will rise to $325 per adult and $162.50 per child.
Jan. 1, 2016: The penalty for people who do not purchase health care insurance will rise to $695 per adult and $347.50 per child. Employers with up to 100 employees can now be served.