Small Business Owners Not Flocking to New Health Care Exchanges

new health care exchanges, Illinois small business law attorneys, small business health insurance, SHOP, Gierach Law Firm, Under the Affordable Care Act (ACA), businesses with less than 50 employees are not required to provide healthcare coverage to their employees. However, because of the ACA, there are now additional small business health insurance options available to employers, and employees can also obtain individual coverage through the federal health care exchanges, and soon through state-based small business health care exchanges.

Insurance firms and brokers have found that since the implementation of the ACA, small business owners have decided to re-enroll their employees in the same plans they maintained before the implementation of the ACA, instead of utilizing the ACA insurance marketplace to purchase new coverage. Small business owners have re-enrolled partially in order to provide both themselves and their employees with more time to determine which of the available insurance options they would prefer to select. Many small business employers have decided to re-enroll in their existing plans, even when these plans are not in compliance with the new rules required under the ACA.

Small Businesses and the Provision of Healthcare

Small businesses in the U.S. are responsible for employing 34 million people, and it is the smallest businesses that are increasingly deciding not to continue providing health insurance to workers. Many smaller employers have decided to keep existing plans in order to avoid the health care exchanges all together. According to a recent survey by the Kaiser Family Foundation, out of those employers with between three and nine employees, only 44 percent provide insurance coverage to their employees, though a decade ago 52 percent of these small businesses provided employer-based health insurance. However, using the ACA healthcare exchanges does provide some savings to small business employers by allowing them to access tax credits they would not otherwise receive if they maintained their existing group employee insurance plans.

Furthermore, small-business health option (SHOP) exchanges have begun to be rolled out in order to allow employees of small businesses to choose their own individual healthcare plans. However, the small business exchanges have had significant technical issues from the start. They were originally supposed to debut last year, but the launch was pushed back an entire year to November 2014. Now as small business exchanges are being tested for their launches in Illinois, Delaware, Missouri, and Ohio, flaws have been reported in the new system.

So far, many small business employers have been unimpressed when they have attempted to use the employer-based health insurance marketplace to find new plans for their employees. One of the main complaints, besides difficulty with using the actual web-based platforms, is that the insurance products being offered are subpar or widely more expensive than their existing insurance policies. Even those small businesses that have used the exchange to purchase new health insurance plans are concerned about how they will be able to continue paying for the plans if the tax credits they have received are no longer provided.

The rising costs of employer provided health insurance, the confusing and lengthy laws of the ACA, and the new individual policy options available on the health care exchanges have all served to disincentivize small businesses from purchasing new policies for their employees. Small business employers are deciding to reinvest in existing employer-based health insurance plans instead of accessing the new options provided under the ACA.

If you need professional legal assistance for your small business, or have questions about business health care, contact the Illinois small business law attorneys at the Gierach Law Firm today.