Report: 1 in 8 employer insurance plans getting the axe since Obamacare

C.J. Ciaramella Contributor
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One in eight small businesses have had or expect to have their health insurance plans terminated since the passage of President Obama’s health care reform.

This figure comes from a National Federation of Independent Business report which surveyed small businesses one year after the passage of the Patient Protection and Affordable Care Act.

The report, released today, found prevailing negative attitudes about the law’s impact among small business owners.

Among the most striking of NFIB’s findings was the number of employer health insurance plans that have been or will be eliminated since PPACA’s passage — 12 percent, or one in eight. Eliminating employer health care plans “is the first major consequence of PPACA that small-business owners likely feel,” the report said.

However, those plans are being replaced by new products. The number of small employers offering or not offering employee health insurance is likely to change little over the next 12 months, according to the report.

Still, the NFIB said the amount of change in plans was out of the ordinary.

“We are not aware of any data suggesting we’ve had turnover anywhere near this level in the past,” said William J. Dennis, a senior research fellow at the National Federation for Independent Business.

The NFIB study also found 20 percent of small employers expect to significantly change their benefit packages the next time they renew their health insurance plans. Almost all of them expected to see diminished benefits, increased employee costs, or both.

However, the American Public Health Association disputed the study’s findings. APHA Executive Director Georges Benjamin said the study was mostly opinion and it was far too early to be criticizing the law, especially since most of it hasn’t even been rolled out yet.

“Most of the major parts haven’t gone into effect and shouldn’t be causing these market changes,” he said. “We’ve seen a lot of people blaming the law for things they ought not be blaming it for.”

Benjamin also said there was hidden costs and savings not factored into many studies of health care costs.

“We’re hoping that when people do these studies they’ll include the costs of absenteeism due to sickness and reductions in worker’s compensation,” Benjamin said. “There are a lot of little pieces that they need to put into their equation.”

The NFIB poll also surveyed small businesses about their attitudes toward the PPACA. (AARP won’t acknowledge financial interest in Medicare copay debate)

The vast majority of small employers with some knowledge of the PPACA didn’t think it would reduce the rate of health care costs or administrative burdens. They did think it would increase taxes and add to the federal deficit.

Although those surveyed agreed that PPACA will result in more people having health insurance coverage, they didn’t think it will increase the general health of the American public.

NFIB is an advocacy group for small and independent businesses. The poll was conducted by Mason-Dixon Polling and Research.

For the purpose of the survey, a small employer was defined as a business employing 50 or fewer employees.