By ASHLEY ARCHIBALD
The Union Democrat
More than 30 small business owners from Tuolumne and Calaveras counties gathered recently to hear health insurance representatives discuss the new requirements for business owners that will take effect by October 2010.
The presentation, hosted by Ray Suess Insurance & Investments, delved into the timeline created by the more than 2,000-page bill that passed in March and mandates coverage for every American.
The bill is confusing for business owners who have to figure out the implications of the complicated legislation on top of the day-to-day pressures of running a small business, said Steve Smith, a regional sales manager for Blue Cross.
“Many people don’t have a clue what’s going on,” Smith said.
Whether they know it or not, business owners are already being affected by the bill.
Though it was passed in March, the bill included certain provisions retroactive to January of 2010, including the creation of a small-business tax credit and a payment to seniors for prescription costs.
Ninety days after enactment, high-risk pools — patients with critical illnesses that are costly to insure — and early retiree insurance requirements came into effect.
By October, business owners have to offer insurance to children of employees who are 26 years old or younger, even if they already have coverage through an employer, school or spouse.
Before the bill, dependent coverage varied from provider to provider, often ending by the adult dependents graduation from college for 23rd birthday.
Providers will also be prohibited from caps on lifetime benefits or discrimination based on salary or pre-existing conditions for dependent children under the age of 19.
Providers will pay their first multi-billion dollar provider fee in January 2014, as well as face changes in rating structures, competition from state-based exchanges and cooperatives and a requirement to accept people of all ages despite pre-existing conditions.
Although many of the changes do not directly impact small businesses, changes in the structure of health care provision will force rates upward according to Steven Vincent, vice president of Anthem Blue Cross.
“There are no immediate changes to benefits, premiums, physicians or hospital networks,” Vincent said, referring to Blue Cross customers, “but premiums could be impacted in the future.”
At this point, the penalties for not having the mandated insurance are much lower than the cost of providing insurance, Vincent said, which encourages people to only buy insurance when they need it.
That defeats the purpose of pooling risk, and could pass on costs to businesses or individuals that choose to be insured.
The legislation also reduces payments to doctors from Medicare, government insurance that insures the poor. That will shift costs to private insurers, Vincent said.
Vincent left his audience with one assurance — very little in the 2,000 page document has been defined, meaning that the legislation is fluid and will change as provisions get implemented over the course of the next four years.
The presentation scared some clients, said Adam Suess, who runs the business with his brother.
“The part that they got a little concerned about was explanation of what will mean to them as business owners,” he said.
The changes will roll in quickly through 2014, and Suess Insurance, and brokers like it, will be saddled with the responsibility of determining how changes will affect clients and what the best options are.
“It’s not our job to dictate what the government should or shouldn’t do,” Suess said. “We take what we’re given and make it work best for our clients.”
According to Smith, legislators had a choice when they began to write the bill — they could address the rising costs of health insurance first, or the need to insure the uninsured.
Legislators chose to hand down a coverage mandate first, which helps the estimated 40 million Americans without insurance, but that only goes so far, Smith said.
“They’re not doing anything to address the actual cost of insurance,” Smith said.