Now that the health care law has gotten the green light from the U.S. Supreme Court, business owners across Minnesota are running the numbers to see how the law's requirements will affect their businesses in the coming years.
The law affects employers in different ways, depending on their size. Many will have access to tax credits, but also will face new taxes and potential penalties. Small and medium-sized businesses will be on the front lines of change.
"Most are relieved," said Kate Johansen, lobbyist for the Minnesota Chamber of Commerce. "It's sort of like the devil you know. They've been living with it for two years. Now they can move ahead and start planning, knowing the law is in place."
Nearly 490,000 people in Minnesota, or 9.1 percent of the population, lack health care insurance. But nearly seven in 10 of them have jobs, according to state data.
Most often, they're self-employed, work for firms with fewer than 10 people, or have part-time, temporary or seasonal jobs. They're also more likely to hold multiple jobs than is the general population.
To entrepreneurs like Phillip Porter, the law holds promise of more affordable insurance for his handful of part-time workers.
"We'd like to offer benefits, but it's just out of reach right now," said Porter, president and founder of Eagan-based Crystal Treasures. "It's just too expensive."
Porter's small firm sells inventory management services to help homeowners get better insurance for household items if disaster strikes. Porter himself is tagging onto his wife's health care plan. And after spending 20 years at the Gillette Co. in St. Paul, has a pension he can tap into when he retires.
"Not everyone has that safety net," he said.
Backers of the law believe that insurance exchanges, a key provision, will provide a new avenue to bring down the cost of insurance, particularly for individuals who don't get insurance through work and for businesses with fewer than 50 employees, such as Porter's.
The exchanges, which are supposed to be up and running in 2014, in theory promise to make shopping for health care as easy as buying airline tickets online.
As many as 1 million individuals and small businesses in Minnesota are expected to use the exchange, according to state estimates.
Harvey Zuckman, owner of FirstTech Computer in Minneapolis, employs 60 workers -- about 50 are full-time -- which may put him on the cusp of eligibility for the exchanges, at least when it first goes online. The federal law defines a small company as having fewer than 50 workers, though Minnesota could choose to expand the number.
"We'll have to take a closer look to see if we qualify for the exchanges," Zuckman said. "Frankly, our insurance options and whether or not we expand shouldn't depend on the number of employees we have."
Zuckman applauded the ruling but said he'd prefer a single-payer approach so he could get out of the health care business. Premiums and labor costs associated with shopping for and administering plans remain an obstacle to anyone trying to start a business or hire more employees, he said.
Last year, he avoided paying a 40 percent hike in premiums by finding another plan that would raise it only 20 percent.
"This is a huge step to providing health care for all," Zuckman said. "But it doesn't entirely take the onus of health care off the backs of employers."
'Pay or play'
Businesses with 50 to 150 workers face more complex choices starting in 2014. While the law doesn't force larger businesses to provide insurance, those that don't could face a $2,000 fee per full-time employee, depending on a host of factors. Some businesses will face a "pay or play" scenario, where it may make more financial sense to pay the penalty and send workers to the exchanges to buy private insurance.
Those penalties are a sore spot for groups such as the National Retail Association. Officials at the powerful industry group said the law "wrongly focuses more on penalizing employers and the private sector than reducing health costs," and vowed to "redouble its efforts" to repeal the law.
Jon Liss, president and third-generation owner of National Camera Exchange, thinks it's a good idea that "everyone will have to pony up.
"In the long run, it'll save this country money," he said.
What's needed now, Liss said, are more substantial changes to bring down costs.
"I don't see anything changing until there's some competition," he said, addressing his lack of choice among health insurance plans.
National Camera, which has about 180 employees, has offered insurance for three decades. But in recent years the group rate has risen by at least 10 to 12 percent every year, Liss said.
"These people who work here are paying a fortune out of pocket," Liss said. "It's killing them."
Whether exchanges will make the marketplace more competitive remains to be seen. The law will force hospitals and clinics to start paying penalties if patients are readmitted. In Minnesota, various efforts are underway to lower costs by better focusing on chronic diseases and preventable illness.
While views of the law vary, everyone agrees the current path isn't working. And no one believes the Supreme Court had the final word.
"I'm not sure there's enough in this law to help the small business, but I believe it's an important law," Liss said. "We're all getting health care, whether or not you have insurance."
Jackie Crosby • 612-673-7335