One thing many small business owners would agree on is that the current health insurance landscape is terrible for small business. Small businesses struggle to provide benefits, and usually pay more for less coverage. Despite several attempts at a creating a nationwide health care plan suitable for all, we remain as uncertain as ever about what will happen next. But, the one certainty we do have is that costs continue to rise, and every piece of legislation set forth so far has failed to address some key issues: access to care, price transparency, and high prescription drug costs.
Last week, another Republican proposal to replace the Affordable Care Act (ACA) did not have the votes necessary to pass. And, the uncertainty remains a negative for small businesses, because nobody knows whether the ACA will eventually be repealed, modified, or remain in place.
While the ACA presents small businesses and the self-employed with high costs and limited choices of doctors, the proposed bills have done little to remedy these issues.
In case you didn’t know, insurance companies don’t like covering small businesses, and they like to avoid insuring the self-employed. Why? Individuals and small groups are just too big a risk. Insurance is designed to spread risk among large groups, especially those with plenty of young, healthy people paying premiums for services they don’t use.
Keep a few facts in mind:
- Small business owners are old. More than half of all small business owners are over 50. Another 33% are between 35 and 49.
- Small business owners and the self-employed are likely to have pre-existing conditions. According to HHS, 75% of Americans aged 45-54 have a pre-existing condition, and 84% of those 55-64 have such a condition.
- Overwhelmingly, the self-employed are likely to qualify for ACA subsidies, applicable to households up to 400% of the Federal Poverty level. That’s $47,550 for a single person household, $97,200 for a four-person household. More than 19 million of the 24 million “non-employer” businesses had total receipts of less than $50,000 in 2015.
Here are some other provisions of the ACA that people should know:
- “Guaranteed issue” – everyone can get health insurance, meaning you can leave a job to start a business and still get insurance.
- No exclusions for pre-existing conditions – meaning if you have high blood pressure or arthritis or ever had a substance abuse problem, you can still get health insurance.
- “Community” rating – insurance rates set based on the health of those in a community rather than one individual’s own health.
- Subsidized insurance for low-income individuals – meaning you can afford insurance in your first years in business or if you don’t make much money.
- Minimum standards for what insurance must cover – insurance must cover preventative care and provide adequate coverage for most conditions.
- “Health exchanges” for those not covered by employers’ plans – meaning your small business employees can get insurance making it easier for you to attract talent.
- No lifetime cap – meaning one terrible illness cannot cause you to lose insurance for the rest of your life.
Americans spend more on health care than any other developed country, and we have less to show for it, with shorter lifespans. We pay more for prescription drugs. We keep spending a higher percentage of our GDP on health care, making America less competitive.
We can only hope that eventually, the lawmakers will come together with all parties involved in the health care continuum to create a plan that incentivizes small businesses to keep offering great benefits to their employees. Now, more than ever businesses of all sizes need to put a strategy in place to control costs and put control back in the hands of the individuals.
Organizations need to start looking beyond simply renewing their insurance or trimming benefits as a way to lower costs. Offering plans with Health Savings Accounts (HSAs), and additional programs, such as voluntary benefits provide an opportunity to put control in the consumers’ hands.
The NARFA Team continues to provide great strategy, programs, and support for our member businesses. It is time to get control of your benefits and thrive instead of struggle during these uncertain times. There’s a reason that 99% of NARFA members stay with us year after year. NARFA has remained strong for almost 90 years.
*Thanks to @RhondaAbrams for some of the content in this article