By
Tom Still
MADISON
– Matthew Gonnering, the chief executive officer of Widen Enterprises, isn’t
the kind of boss who wants his employees to go without health-care coverage. If
nothing else, he explained at a recent gathering, offering health insurance
helps attract and retain the kind of talent necessary to run his tech-related
business.
However,
rising health care costs and the advent of the federal Affordable Care Act
combined to make things more complicated for Gonnering and his team at Widen, a
digital asset management company in Madison.
As
Gonnering told a recent meeting of the Wisconsin Innovation Network, Widen was
faced with a 12 percent rate hike in 2014 for its existing coverage, modifying
its coverage to share some costs with employees, or ending company-sponsored
coverage and letting workers fend for themselves on the federal government’s
health insurance marketplace “exchange.”
In
the end, Gonnering said, the company elected to keep its existing coverage plan
with employees sharing in premium payments – something they didn’t pay in the
past. That will continue for at least one year while the company waits for the
small business side of ACA, or “Obamacare,” to sort itself out.
“We
felt we could remain competitive with employees, in addition to the wellness
plan that we had… without having those employees get nervous or worry about
switching jobs,” he said.
That
story is typical for small businesses across Wisconsin and the United States as
the Affordable Care Act inexorably begins to change how those companies, and
millions of individuals, shop for health care coverage. As 2013 rolls to a
close, many wonder: What’s our next step if we want health care coverage in the
year ahead?
The
answer depends a great deal on the size and current coverage plan of your
company – and whether you’re a one-person shop.
Al
Wearing, the chief insurance officer for Group Health Cooperative of South
Central Wisconsin, spoke at the same WIN meeting. While he wants federal
health-care reform to work over time, Wearing said it may be better for some employers
to err on the side of caution before embracing a change that could confuse or
even harm their employees.
The
federal website for the ACA, www.healthcare.gov, appears to be
functioning well after a dysfunctional start, but Wearing said many small
business owners may still elect to “stay on the sidelines” and accept renewals
of current coverage while the law’s small-business mandates get worked out.
The
story is different for individuals, especially those who lack coverage now.
They must sign up by Dec. 23 through the website if they want coverage
beginning Jan. 1, 2014, said Barbara Zabawa, head of the health care law team
for Whyte Hirschboeck Dudek in Madison.
So
far, the federal government has not delayed the individual requirement. That
means uncovered individuals who do not sign up by March 31, 2014 will face
federal tax penalties that will grow over time. For uncovered people who don’t
sign up for coverage by March 31, the penalty is $95 per adult or 1 percent of
annual income, whichever is higher. That penalty grows in succeeding years –
and the sign-up periods will be more sharply defined.
For
entrepreneurs and sole proprietors who aren’t covered today, Zabawa said,
checking out www.healthcare.gov makes sense
because it can match people to a coverage plan.
“It’s
really going to depend on their income and where they live,” Zabawa said. “In
many cases, they may find themselves pleasantly surprised about available
coverage plans.”
Zabawa
agreed the new law is more complicated for businesses. The ACA’s Small Business
Health Options Program is open to employers with 50 or fewer full-time employees,
but deadlines tied to small business coverage have been extended. Most
businesses with more than 50 employees cannot use SHOP today, but it will be
open to employers with up to 100 full-time employees in 2016.
A
word of caution: If you’re eligible for job-based insurance, you can still
consider switching to a federal marketplace plan. But you won’t qualify for
lower costs based on your income unless the job-based insurance is unaffordable
or doesn’t meet minimum standards. You also may lose any contribution your
employer makes to your premiums.
The
bottom line: Small businesses may be able to improvise in 2014, but uncovered
individuals and one-person shops may want to “insurance shop” now. Consider it
a new angle on the online holiday buying season.
;
