Reacting to delay of mandate, small-business owners say it still isn’t clear what’s required under Affordable Care Act.
The Obama administration’s decision to delay forcing some businesses to provide health insurance or pay a penalty gives the government more time to address one of their major concerns — that the rules remain too murky for them to even understand what’s required.
Kate Johansen, a lobbyist for the Minnesota Chamber of Commerce, said most of the group’s 2,400 member businesses have felt overwhelmed. A webinar with HealthPartners in January drew more than 1,000 registrants hungry for information. And more than 150 businesses sent people to a half-day workshop sponsored by the chamber last month at a Brooklyn Park hotel.
“There’s been a lot of paralysis generated by the sheer volume of regulation and complexity and uncertainty surrounding the law,” Johansen said. “Now there’s one more year to help educate businesses on how to make a good decision and one more year for the federal government to get it right — with regulations that are clear enough and timely enough to implement.”
The Treasury Department said in a blog post Tuesday that it would postpone the piece of the Affordable Care Act that requires firms with more than 50 workers to provide health care coverage or pay a penalty. That provision now won’t go into effect until 2015.
The delay gives the federal government more time to simplify the rules and for businesses to figure them out.
“It’s a very welcome respite, but don’t get too giddy yet,” said Christopher Schneeman, a broker with Seven Hills Benefit Partners in St. Paul. “We haven’t seen the actual information. What we’ve read is a blog post.”
Schneeman said he received a flurry of phone calls from business owners after Tuesday’s announcement.
“Employers are relieved that the hard decisions they might have had to make can now be put off until they can get the necessary information to make better decisions,” he said.
Under the law, companies with more than 50 full-time workers that don’t offer basic and affordable health coverage will be assessed a $2,000 fee for every worker beyond the first 30.
Industry groups have complained since the law’s passage in 2010 that it created administrative hardships. Many warned that some companies might lay off workers or put off expanding their businesses. The law defines a full-time worker at 30 hours a week but allows for an average over several months.
Who’s covered? Hmmm.
Businesses in retail, hospitality and agriculture face the biggest hurdles complying with the law because they rely on seasonal and part-time workers who might work 20 hours one week and 32 the next.
Companies with 50 to 250 workers also have said they felt crushed by the complexities of the law, as they often are too small to have a human resources department or tax adviser to help sort through the options.
“A lot of them don’t know if they have a $10,000 problem or a million-dollar problem,” said Terra Hudlow, a compliance consultant with the brokerage firm Marsh & McLennan Agency in Brooklyn Park.
While cost is a huge factor for business owners and leaders, Hudlow said, it’s just one of many.
“They want to know, ‘How will it impact my employees? Will they go to the exchange? How will it impact our culture?’ This delay gives them more breathing room, more time to figure out how to be in compliance in 2015.”
Little impact on MNsure
The decision won’t affect ongoing work on MNsure, Minnesota’s new health insurance exchange, which will be available for businesses with 50 workers or fewer.
“We’re evaluating further … but for MNsure, there’s not a whole lot of impact,” said April Todd-Malmlov, executive director of the exchange.
Other elements of the health care law remain intact, including the requirement that all individuals have coverage and that insurance companies provide a basic level of coverage, even for those with pre-existing conditions.
About 80 percent of Minnesota workers get insurance at work, and many surveys have predicted that companies that already provide insurance will continue doing so.
“All the research around employer-based coverage says that it’s a decision around attracting and retaining the best employees,” Todd-Malmlov said.
But the announcement didn’t seem to curb the uncertainty for business owners such as Dave Svobodny, who has about 46 workers at three Settergren hardware stores in Minneapolis.
The stores offer insurance to full-time employees, which Svobodny defines as those working 40 hours per week. For now, he said he’s sticking to his wait-and-see approach.
“We’re not sure about a lot of things. Do we grow or not?” he said. “As a mom-and-pop business, I’m not going to waste my time until I know what the rules are.”