NORWICH – With national health care reform now the law of the land, small business owners are striving to understand all that the new law requires. Last week, several small business owners gathered at Park Place Restaurant in Norwich for a special presentation and counsel from United Advisors, LLC, subdivision of National Financial Partners.
On the table, hot-button issues that are alarming to many small business. Local entrepreneurs raised questions regarding the individual mandate that requires everyone to have health insurance by 2014 under the new law; penalties for those who don’t obtain health care; and the responsibilities of business owners to offer health care coverage to all employees.
“Health Care is here,” opened presenter and employee benefit consultant Abel Mendes. “And every time there’s a mandate associated, there’s also a cost involved.”
While some new implications for health care are set to take place in 2013, Mendes noted that consulting agencies like United Advisors are thriving to stay updated as there are changes to them almost on a daily basis. “Attempts at repeal and modification are ongoing,” he said. “A key focus is on the election in November, but it is still the law and federal implementation is moving forward.”
Regardless the ongoing efforts of repeal, and the government initiative to move forward with health care reform, there are a lot of uncertainties, including what employers’ health care plans might look like and what some of the costs will be. Still, many of the changes in federal regulations have been in place in New York State for years, Mendes explained.
“New York State is one of the most regulated states for health insurance. Other states are not as heavily regulated ... A lot of the new mandates we already have,” said Mendes.
The individual mandate – put in place to fund the program – also raised some eyebrows among business owners. By 2014, most people must have health insurance or pay a fine, said Mendes. For individuals, the penalty would start at $95 per year or up to 1 percent of their income, whichever is greater. That would increase to $695 per year, or 2.5 percent of income, by 2016. Families of four will be required to pay a little more; $2,085 or 2.5 percent of household income, whichever is greater, by 2016.
“We’re trying to assist employees large and small to adjust to the new effects of health care reform,” said Mendes.
A Norwich Family YMCA representative, who chose to withhold her name, questioned how new regulations will affect local agencies, particularly non-profits. The Y currently employs about ten full-time workers and nearly 100 part-time employees, all of whom must be offered health coverage under the new law.
“This is something I’m going to be checking into more ... My first concern is how this is going to impact a non-profit,” she said, citing that several of the employees live on a limited income. “A lot of those people are struggling already. Now, to be penalized for not having health insurance doesn’t seem fair.”
Norwich-based L.W. Morse & Son Heating and Plumbing, also present during the discussion, said the new mandates will unquestionably have an affect on the bottom line for many small businesses.
“We’re fortunate because as we stand now, our employees get their insurance through their spouse’s employer,” said Donna Morse, co-owner of the company with her husband, Marty Morse. If the business were to offer health care to its employees, she said it would pose a threat to its viability.
“I’m not sure if this is going to be a good thing or a bad thing,” Morse added. “All I know is that the cost (of health, liability and workers compensation) was going up every year at a rate of 10-14 percent prior to reform and it’s still going up ... We’re in an area that you could only have rates go up so high or you’re going to oust yourself out of business.”