Since 2010, politicians have shared their versions of best and worst case scenarios with the implementation of the Affordable Care Act (ACA). While some promised improved access and lower cost of care, others warned of businesses crumbling under the weight of new mandates and costs. Most on the sidelines would assume the chips would fall somewhere in the middle.
Sara Kitchen, who owns Kitchen Electric with her husband Paul in Washougal, didn’t really expect any changes, as they are a small employer under the requirement threshold (employers with more than 50 full-time employees are required to provide health coverage). When it came time to shop for benefits, she was surprised.
“At the time [the ACA] went into effect, we had a group policy,” explained Kitchen. “Our broker said it would save us money to shop within the exchange. What I was stunned by is that there is no tax benefit to us or to our employees for offering them health insurance unless you offer a group plan. The group plan was triple what it would be for everyone to shop for their own policy.”
With additional employees becoming eligible for benefits, they find themselves at a loss.
“At the end of the day, I want to offer my employees health benefits so they can be healthy, but it’s a bad deal that there is no benefit for really small businesses,” she added.
Vancouver-based Blind Onion Pizza owner Gene Schwendiman struggled with changes in the health plans themselves.
“Prior to ACA I had what is now considered to be a gold package and paid about $500 a month. With the ACA that program jumped to some $900 per month. I now have a Silver package with fewer benefits, higher co-pays and more out of pocket that costs $700 per month.”
Added to rate and plan changes, Schwendiman said he relies on expertise within trade associations such as the Washington Restaurant Association to keep him and his employees up to date and compliant with the complexities of the ACA.
Effective Web Solutions in Washougal has taken an entirely different approach to offering healthcare to their employees. Offering Direct Primary Care (DPC) as a benefit to their employees, Billing and Accounting Administrator Deb Ayers said they can offer an affordable option where they might otherwise not have been able to. In many cases, DPC can work as a complement to a higher deductible Bronze plan, covering the member’s basic health care needs.
Of course, some businesses have benefitted from the implementation of the ACA.
Snap Fitness owner Doug Vaughn has seen his locations in Camas, Battle Ground and Woodland increase membership in the wake of health care changes.
“As health insurance costs continue to rise and more financial burden is being put on businesses, we are seeing more employers request discount programs for their employees to add a low-cost benefit. I expect this trend will continue,” Vaughn said, noting that some insurers will reimburse the cost of fitness memberships.
“People are becoming wise to the fact that our system has been more about “sick care” rather than health care, and now are starting to take control of their health rather than simply treat sickness,” he added.
With approximately 150 employees, Vancouver-based ControlTek has uniquely embraced the Affordable Care Act.
“Our company’s focus on wellness is supported in the ACA,” said Stacey LaFrazia-Smith, ControlTek VP of HR and marketing. “The law gives a company like ControlTek the go-ahead to incorporate a robust wellness program into our company culture and tie employee participation to their health insurance premium. Linking participation to health insurance premiums helps our participation rate sit above 90 percent. Healthier employees allow our company to function efficiently and improve our employees’ well-being.”
With a focus on doing what is best for their employees, LaFrazia-Smith said the company even took their lumps in stride.
“In 2015 we paid our first reinsurance fee, a tax to the tune of over $10,000,” she said. “This new tax was something we had to prepare for financially and include in our 2015 healthcare budget.”
Industry experts have been impacted by the implementation of the ACA as well. Greg Seifert, CEO Biggs Insurance shared his experience.
“It was different than I expected, in that I did not anticipate the number of small employers choosing to drop coverage and send their employees to the exchange, and I underestimated the degree of confusion in the marketplace for all size employers,” he said. “Otherwise, it was pretty much as I thought – some plusses and some minuses.”
Seifert admitted that the health plans for Biggs’ own employees are not the value they were pre-ACA.
“Our coverage is not as good due to changes to the metallic plan designs,” he said. “The plans became weaker while the rates for 2015 were relatively flat.”
Compliance, Sifert explained, is an area of challenges.
“This is a daily task as the target moves and final regulations come out,” he said. “We have retained the services of an ERISA attorney and receive ACA updates each day or as changes are made.”
“The complex and moving targets are difficult for employers to understand, even the broker community struggles. Consistency would be helpful,” noted Pam Hublitz, VP of Tri County Association of Health Underwriters (TCAHU) and senior VP of Golsan Suggs Insurance and Risk Management. “I think the most important thing we do is try and move the legislative needle, being the voice for both our broker members as well as employers.”
For the businesses reviewed in this article, most found their healthcare costs rise and often while yielding a devalued benefit. However, none of them crumbled, changed their hiring practices or laid off employees.
Some like the changes brought about by the ACA, while others don’t. For those of us on the sidelines, that places the chips neatly somewhere near the middle.