Obamacare Changes require switch from small-group market to individual — and more costly – health insurance plans.
Healthcare reform is bringing an unpleasant surprise for thousands of mom-and-pop shops, small law firms, technology startups and other owner-operated firms in New Jersey.
For years, owners of companies with no other employees could buy insurance in the small-group market and benefit from a wide selection of plans, less-expensive drug coverage, and other advantages compared to the individual health insurance market.
But in December, the state changed its small-group insurance regulations to match the Affordable Care Act, which defines businesses as having at least one employee who is not an owner or the spouse of an owner. That excludes both husband-and-wife teams and partnerships with multiple members but no other staff.
As those firms’ health-insurance policies expire this year, instead of being allowed to renew their plans or buy another small-group plan, they are being directed to research their options on the individual marketplace at Healthcare.gov.
And they are barred from purchasing small-group insurance through their brokers or the new federal Small Business Health Options Program. “There are a lot of small employers who are in for a very rude awakening,” said Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute. “As soon as their policies expire, they’re not going to be able to renew them on the marketplace or even the SHOP. They’ll experience rate shock, and many won’t qualify for a subsidy.”
“We view it as one of those unintended consequences that bubble up in a place like New Jersey that has so many self-employed and freelancers and small law firms and places like that — father-son plumbing firms, electrical engineers and so on. It’s going to have an impact,” she said. (Rinde/NJSpotlight)