As President Donald Trump and the new Congress sharpen their scalpel to cut and remodel the Affordable Care Act, what does that mean for small businesses in California? Covered California, the state program that administers the health care act, is probably a better model compared to other state exchanges. Yet, the program has not been devoid of its share of complications for small business.
Chief among the law’s problems is cost. As the National Federation of Independent Business and most of its small business members will tell you, employers have complained about costs forcing them to reduce employees, cut wages, and some even worry about keeping their doors open.
Covered California has worked to help small business find plans that work for them. The Covered California website has a page dedicated specifically for small business to help choose the plans that are right for both business and employees.
Still, despite the strong effort put forth by Covered California for small business, there have been noticeable glitches.
- Customers have complained that a single mistake has led to a series of errors resulting in blocked coverage or generation of inaccurate tax forms.
- Customers also lament that they’re bounced from Covered California to their insurer and back again.
- Some find subsidies mysteriously disappear in the computer system, resulting in long periods of phone time and even thousands of dollars in accounting fees trying to resolve the issue.
If the Affordable Care Act goes away and is replaced, as Congress and the President want to do, how does the replacement affect small business and their employees?
With no solid replacement plan on the table just yet, we can only conjecture given some of the public discussions on improving the current system.
The preexisting conditions mandate is popular, as is keeping children on their parents’ insurance until age 26. There is a cost involved keeping these requirements in place that Congress will have to deal with. Will that cost shift to small business, a real concern for our number one job creators?
However, there could be cost savings to small business as well if other changes that have received some attention are made. Creating insurance pools that cross state lines likely would lower costs as insurers compete for small business sign-ups. Health savings accounts, properly fashioned, could give more control to individual employees and take some of the burden off of small business owners. Removing taxes related to health items would help a number of small businesses. For example, taxes on medical devices hurt small manufacturers and the consumers who need the devices.
Make no mistake, the goal of ensuring that every American has access to affordable health care – an endeavor shared by both sides of the political aisle – is a noble one. Should the Affordable Care Act simply be eliminated with no replacement in place, many Californians would suffer, especially in the higher poverty areas of the state.
As government officials consider a replacement for the Affordable Care Act, they should not be hasty. And, they should consider what positive changes would be a plus for small businesses, which in turn could mean not only healthy employees but a healthier business climate and a healthier economy.