Manor’s company employs 45 people. If he brings in just five more, his business would soon be subject to new minimum coverage standards under the 2010 law — and he does not know whether his current health plan would meet this threshold of coverage or how his premiums might be affected.
“These changes are less than a year away, and I still have no information about how much our premiums are going to cost,” said Manor, owner of Bittersweet Catering, Cafe and Bakery. “It definitely gives me pause when thinking about adding another location.”
Nearly three years after the health-care law was passed, federal regulators have only recently begun to define its terms. Major pieces of the overhaul, such as state-run exchanges that will serve as marketplaces for qualified health insurance plans, have yet to take shape, and several rules remain unwritten. Consequently, the picture remains anything but clear for small-business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short.
“There is tremendous confusion and fear among many of my competitors and other business owners in my network, particularly about what you have to cover and how you have to report,” said Hugh Joyce, owner of James River Air Conditioning in Richmond. “In speaking to them, I am convinced that the primary reason we aren’t seeing a robust economic recovery is the uncertainty and costs associated with this health-care law.”
Others are not so critical. They argue that the measures promise to rein in soaring health-care costs and provide a safety net to small businesses and employees, many of whom would be able to buy insurance through the exchanges.
The Department of Health and Human Services three weeks ago issued a final set of regulations on the minimum value for health insurance packages, mandating that plans cover at least 60 percent of health expenses and 10 primary areas of care, including maternity, ambulance and prescription services.
Joyce, whose company employs 150 people, provides what his insurers tell him will “probably qualify” as adequate coverage under the new rules, but he isn’t certain.
If his current plan falls short, experts say he won’t be alone in deciding whether to find a suitable alternative or pay a penalty.
The minimum-benefit plan mandated by the law “is broader than what’s currently offered by a lot of small businesses,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group for providers.
Zirkelbach warned that even firms that already offer sufficient coverage may see their premiums surge under the health-care law. New rules that restrict how insurers can structure their rates could drive prices higher across the board, he said, while small firms could be hit indirectly by a new fee on insurance providers, which some fear will be passed along to individuals and small employers in the form of higher premiums.