More Small Businesses Are Paying Higher Health Care Premiums This Year

Juliegrace Brufke | Capitol Hill Reporter

The Affordable Care Act has done little for small businesses in terms of lowering premiums, with 63 percent saying they saw their rates go up while just 8 percent saw them go down since July 2013.

Fifty-two percent of those affected by the increase suffered a loss while 33 percent increased prices to cope with the costs, passing it on to the consumer, a survey by the National Federation of International Business concluded.

The percentage increase has proven itself to be sizable — of the 63 percent, 43 percent said their rates went up between 10 and 19 percent, 7 percent between 20 and 34 percent, 4 percent between 35 and 49 percent and 6 percent said they faced more than a 50 percent hike.

Despite higher costs, 72 percent said they saw no improvement in the quality of their benefits remained the same.

In 2016, companies with more than 50 employees now face a $100 a day or $36,500 fine per year for each employee if they choose to reimburse workers for individual market health plans instead of offering a group plan.The fine was implemented for businesses with over 100 employees in July.

The survey shows just 3 percent said they were interested in using Obamacare’s SHOP exchange marketplace, designed for small business to buy plans. Only 10,000 small businesses have purchased insurance through the exchange and just 13 percent expressed interest in doing so.

According to NFID, the law’s heath insurance tax is one of the factors driving up prices.

“The health insurance tax is assessed to health insurance companies and is then passed on to consumers of fully-funded insurance plans through higher premiums, plans that most small business owners purchase for themselves and their employees,” the survey concludes. “The tax increased from $8 billion in 2014 to $11.3 billion in 2015.”

A study by the Brookings Institute found regulatory incentives and exemptions put in place by the ACA will take their toll on companies with less than 100 employees.

“While a big company usually has a diversified employee base and financial resources that can help absorb substantial overruns in health care expenses, a small company has neither,” the study said. “One big claim can wipe out a small company.”

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