LEWISTON — Some small business owners may save money for themselves and their employees by limiting the health care benefits they offer to their workers and their families, experts said Tuesday.
The reason is that the federal Affordable Care Act and its health care marketplace may offer equal or better coverage for less money than can be purchased by the employer, members of a small business forum said Tuesday morning.
“It’s a real question whether or not you’ll offer plans to your employees,” Mitchell Stein, policy director for Consumers for Affordable Health Care, said.
The comments arose Tuesday at a forum held at Lewiston-Auburn College and organized by several health care groups and the Androscoggin County Chamber of Commerce.
“We’re trying to help business people make good decisions about how we expand affordable health insurance to people who are sole proprietors or owners of small businesses,” Wendy Wolf, a physician and the president and CEO of the Maine Health Access Foundation, said. “The Affordable Care Act offers an opportunity to think about new options on how one can provide health insurance.”
But, it has made an already confusing insurance market even more confusing.
“The Affordable Care Act has, frankly, made it even more complicated to know exactly what’s going on,” she said.
Beginning in October 2013, people who did not have access to health care were invited to sign up for coverage on the Health Insurance Marketplace at healthcare.gov.
Individuals who earn less than $44,680 or families of four with an income of less than $94,200 are eligible for federally subsidized health care. However, that’s only for people who do not have access to health care in the workplace.
Tuesday’s session aimed to help small business owners with 50 employees or less find their place in the new system.
In most cases, the employer-paid coverage still helps the employee, Roger Prince, a financial consultant with BerryDunn in Portland, said.
“Let’s say the employer pays half the premium and the employees pay the rest,” Prince said. Those premiums are probably tax free. “Even for a low-wage employee, they are saving about 24 cents on the dollar when you have employer-provided coverage.”
The math often changes when families are included, though.
Some plans pay only for the worker and pay none of the health care costs for children or spouses. The unsubsidized portion of the premium can sound less than affordable, Prince said.
“Affordability, for purposes of the act, is only dependent on the cost of single coverage,” he said. “That’s it. Family coverage need not be subsidized at all in order for it to be affordable. “
It can leave caring employers in a bind, Prince said.
Some have decided to end health care offerings and give employees bonuses meant to contribute to their health care costs, preferably on the government site.
Prince recommends against that, he said,
“You’re providing a taxable benefit in place of a tax-free one, so you have to consider that,” he said.
“Think about this,” Prince said. “You might want to discontinue spousal coverage if you’re not providing any employer dollars, because at least that way, the spouse has a chance to qualify for a subsidy. Now, when the spouse goes to the exchange, their subsidy will still be dependent on household income.”
It’s an option,” he told the gathering, which included people from several area businesses. He asked people to look carefully at the details of each plan and each option.
Even the government hasn’t figured out all the effects of its actions, he said.
“The Affordable Care Act is the largest tax act this country has seen since the 1986 Tax Reform Act under Ronald Reagan,” he said. “It’s an incredible act with respect to how many tax implications there are.”
Many smart people don’t understand it, Stein said.
“This is a 2,000-page bill,” he said. “So, there is a lot of information.”
People who have questions about the health care changes are encouraged to go to the government’s website at healthcare.gov or to a website and phone line created by Consumers for Affordable Health Care at enroll207.com or 1-800-965-7476.
dhartill@sunjournal.com
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