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Maine Small Business Owners Check out ACA Options
12/10/2013   Reported By: Patty B. Wight

Small businesses - that is, those with fewer than 50 full-time employees, don't have to provide health insurance to employees under the Affordable Care Act. Some want to, but are finding that new options can be confusing. Patty Wight stopped by a forum this morning put on by the Maine Health Access Foundation to help small businesses forge ahead into this new territory.

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Victoria Kuhn

Victoria Kuhn (left) came to the forum in South Portland on a sort of skeptical scavenger hunt. "I think I'm looking for what can't be had, which is to understand things and make it easy," she says.

Kuhn oversees about a dozen employees at her digital marketing business, Dirigo Design and Development. She currently offers health insurance, but came to check out her options under the Affordable Care Act.

"This is extremely complicated," she says. "I mean, I worked for more than a decade for an insurer so I think I have a fair bit of knowledge about the health insurance industry. But I find the information and rules colliding into each other, complicated and challenging."

True, admits insurance borker Michael Newsome, who helps businesses find their way. "The law is very complex - more words than the Lord of the Rings trilogy."

Complex, because figuring out whether or not a small business should provide insurance depends on many different factors, says Consumers for Affordable Health Care's Mitchell Stein.

"Because for some low-wage workers, they may be better off on the individual marketplace. But if they're offered certain coverages at work, they're precluded from getting those individual subsidies," Stein says. "So it really bears the small employer taking some time, understanding the different ramifications of the law, and thinking about what's best, both for themselves as a business owner, and for their employees."

One particular conundrum small employers are grappling with is around something called composite rates - essentially, a blended insurance rate of all employees in a company. As of Jan. 1, insurance rates will no longer be delivered as a composite, where every employee premium is the same. Instead, the rates will be individualized. In this model, says insurance broker Carrie Baker of Norton Financial Services, older employees stick out like a sore thumb.

"I have a client that the oldest person in the group would have received a $900-a-month premium. The youngest would have had a $300-a-month premium," Baker says.

What this means is that employers now have to reconsider how they will contribute to employees' health insurance. "Am I just going to come up with a defined contribution, and, you know, 'You're older, you pay more - oh well,'" Baker says.

It's nuances like these, says Baker, that put an enormous administrative burden on businesses. And it's the type of decision that made small business owner Victoria Kuhn opt to keep her old insurance plan for employees for one more year.

"I just wanted to wrap my head around what the ACA issues are in the course of this next year, in 2014, rather than feeling rushed, like I have to hurry up and wrap my arms around it by Jan. 1 renewal, which is our renewal date," Kuhn says.

Small business owners in search of new options are being advised to find a good broker, as well as a good tax professional.

Photo: Patty Wight


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