Own a small business? Brace for Obamacare pain
By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL
Local business owners might be hoping the Affordable Care Act’s insurance mandates cover sticker shock.
The law’s employer coverage mandate doesn’t take effect until 2015, but early plan renewals are starting to roll in. And for some businesses, the premium jumps are positively painful.
Local insurance brokers are reporting spikes ranging from 35 percent to 120 percent on policies that renew from July to December. The increases are especially acute among employers with workforces made up of younger, healthier men. That’s because Obamacare prohibits offering lower rates to healthier groups. It also narrows the allowed premium gap between older and younger enrollees.
“It’s like if there were no more safe-driver discounts with State Farm,” said local insurance broker Frank Nolimal of Assurance Ltd. “Everybody has the same rate, whether you have three DUIs, or you’re a (nondrinking) churchgoing Mormon.”
The changes put as many as 90,000 policies across Nevada at risk of cancellation or nonrenewal this fall, said Las Vegas insurance broker William Wright, president of Chamber Insurance and Benefits. That’s more than three times the 25,000 enrollees affected in October, when Obamacare-compliant plans first hit the market.
Some workers are at higher risk than others of losing company-sponsored coverage. Professional, white-collar companies such as law or engineering firms will bite the bullet and renew at higher prices because they need to compete for scarce skilled labor, Nolimal said.
But moderately skilled or low-skilled people making $8 to $14 an hour working for landscaping businesses, fire-prevention firms or fencing companies could lose work-based coverage because the plans cost so much relative to salaries.
Employees who keep their coverage might see leaner take-home pay, which could hurt the economy.
Nolimal said one business client whose monthly premiums will rise from $160 to $340 in June plans to shift most of the increase onto his employees.
“Just like when you see gasoline prices going up an extra dime a gallon, it takes money out of the economy for things like buying a new stereo or having dinner out on the town,” Nolimal said.
The premium hikes could have political implications, as well. Nolimal estimated that as many as 85 percent of small-group plans will renew in November and December. Because new premiums go out 60 days before coverage takes effect, those price hikes will hit mailboxes in September and October — just before November’s elections.
That may be why Wright said Nevada lawmakers seemed keenly interested in hearing what he and other brokers had to say during a recent visit to Washington.
He said lawmakers were “very receptive” to the idea that Nevada officials should embrace a federally established transition period that would let businesses keep their existing plans for at least one more year to blunt the effect of today’s higher costs.
Nevada Insurance Commissioner Scott Kipper said March 25 that he doesn’t have the discretion to allow noncompliant plans to stay in place, based on advice from Nevada Attorney General Catherine Cortez Masto. That decision mirrored a fall conclusion that it would be illegal to reinstate the first wave of canceled plans.
But Wright said he has an opinion from a national law firm that says the small-group situation is different, because it involves policies not yet canceled. He said he and other brokers will work over the next few weeks to sway the commissioner.
https://www.reviewjournal.com/politics/own-small-business-brace-obamacare-pain
