The Greater Rome Chamber of Commerce Small Business Action Council heard an update about the health care law at its monthly meeting Friday.
“Clear as mud,” said Lee Arledge, broker sales vice president for Purchasing Alliance Solutions. “If you have 50 full-time equivalent (employees), that’s where the employer mandate (to offer a health plan) begins.”
Plans offered by employers will have to meet a number of standards, particularly with respect to affordability and a minimum value of coverage.
As it relates to affordability, premiums will not be allowed to exceed 9.5 percent of an employee’s income without the employer facing potential penalties. Plans will also be required to meet a minimum standard of 60-percent cost share.
“Ninety-eight percent of group plans already meet that standard,” Arledge said.
Nonetheless, there still is a real need out there for access to health care protection.
Bob Babcock, president of the Babcock Agency in Rome, used a couple of sectors in the hospitality industry as prime examples.
“Thirty-four percent of hotel employees and about 50 percent of restaurant employees still don’t have insurance,” Babcock said.
The problem for insurers and employers alike is that the law is still evolving.
“We still don’t know what’s in it,” Babcock said.
Arledge said the entire health care/insurance issue is “becoming more complex than ever.”
Curtis Gardner, owner of the Sonny’s Real Pit Bar-B-Q franchise in Rome, said he thinks he will have to use an agent to help him figure out the details.
“I think it created a lot more questions than answers,” he said.
Wayne Robinson, a longtime Rome homebuilder who has become a partner in the operation of Steak ‘n Shake restaurants in Rome and Athens, said the chamber program was helpful.
“It clarified some things that I was unsure about, but I still have a whole lot of questions,” Robinson said.
He also learned that one provision of the law that would directly affect his business is that he would probably have to count employees in both Rome and Athens together when it comes to determining whether or not he would be required to offer an insurance plan.
Arledge told the business group that, for the first three years of the program (2014-2016), only individuals and small groups would be able to purchase insurance plans through health exchanges. Individuals who do not purchase insurance will be subject to penalties, which will increase annually.
In 2014, an individual who fails to purchase a policy will be subject to a penalty of $95 or 1 percent of their income. That increases to $325 or 2 percent of income in 2015, and in 2016 the penalty will go up to $695 or 2.5 percent of income.
“Health insurance is really starting to become a commodity,” Arledge said. “The exchanges will essentially become a competitive marketplace designed to make it easier for Americans to buy insurance.”
Arledge said insurance carriers who choose to participate in the exchanges must offer a plan that provides at least a 70 percent cost share.
While the complexities of the law remain a mystery to many, Babcock summed up the session by telling the business group: “It’s here, and we’ve got to deal with it.”