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Thursday, September 5, 2013

rude awakening on Obamacare for a small business owner..

I'm a policy wonk.  I enjoy reading laws and regulations. I don't know why.  Perhaps it's because I cut my entrepreneur teeth in a business steeped in regulation.

When I say I enjoy reading laws and regulations, it's not that I like laws and regulations, it's that I like to dig in and see what they really say so that I can think for myself rather than relying on others or the media to tell me what's what.

I made an exception with Obamacare.  I started to read it and then stopped.  There's just so much there and it seemed like a moving target.  I now see that I should have done my own homework because as a small business owner who provides health insurance benefits to employees, I got the impression from the media that Obamacare wasn't going to impact to us.  WRONG.

Let me start by explaining how we have our health insurance set up.  We are members of the Chamber of Commerce and we participate in their group coverage under the ChamberChoice program.  We pay a flat annual amount for each employee towards benefits.  All full time employees get the same flat amount regardless of salary. The employees get to choose between two programs, one with a higher premium and lower deductible and one with a lower premium and high deductible. The employee pays the difference between the benefit coverage paid by the company and the premium for whichever program they select.

Over the years, as we are able to do so, employees receive increases in salaries and annual benefit contributions by the company.  Just last month everyone got a raise and the annual benefit contribution was raised.  Everyone was happy.

Then we got a notice from ChamberChoice that all of their program packages were going to be amended under Obamacare and they don't yet know what kinds of coverage will be offered or what they will cost.  This notice came with an offer to renew our existing style of insurance at the end of December so that we could buy time until December of 2014 to figure out what to do.  WOW.  I now knew that even as a small business owner we were impacted because the programs that we knew and like are going away and we don't even know what's to come as replacement.

We contacted ChamberChoice for more information and then got our second WOW.  The news is that even though we are a small business, we have to follow a rule that limits the amount of health insurance premiums paid by the employee to 9.5% of their salary. This changes the entire structure of our salary and benefits. We're running figures now and I don't yet know how we will need to adjust.  I have no idea what premiums will be under the new programs that will follow after December 2014. I have an inkling that they won't go down.  The outcome will be a rebalancing of benefits versus salary.  Our game plan will be to keep the net the same but juggle salary versus benefits to fit the Obamacare world.  I can only guess that the real bottom line will be less in our pockets, no matter what.  This stinks.

I hope everyone remembers this at the ballot box.  As we have the opportunity to replace politicians who support Obamacare with those who might repeal it, let's do it.

While thinking this through, another email arrived from ChamberChoice and I will share it with you in case you haven't heard this good news yet.

"Health Care Reform impacts ALL of your employees - even those who are part-time, seasonal, and currently not eligible for or purchasing benefits - as well as all of their family members. A key provision of the Affordable Care Act is the "Individual Mandate," which requires most individuals to purchase health insurance coverage or pay a penalty.  

On August 27, 2013, the IRS issued final regulations on the individual mandate. The rules clarify whether certain types of coverage are acceptable. 

The penalty for not obtaining health insurance coverage will be phased in over a three-year period, as follows:

2014: The penalty will start at $95 per person or up to 1 percent of income.
2015: The penalty will increase to $325 per person or up to 2 percent of income.
2016 and after: The penalty increases to $695 per person or up to 2.5 percent of income.
The penalty is calculated on a monthly basis and will be assessed for each month in which an individual goes without coverage!

The ChamberChoice Client Resource Center can help your employees and their family members understand the Individual Mandate. The health care arena is changing and all individuals have a responsibility to comply with new legislation or pay a penalty. Our representatives can help any individual sort through the confusion, understand their options and responsibilities, and find the solution to meet their specific needs.  

Please share the enclosed Health Care Reform bulletin with your employees and encourage them to call our CRC at 1-800-377-3539 to speak with one of our licensed representatives."