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Monday, December 16, 2013

Tom Still: For small businesses and entrepreneurs, some year-end advice on health care


By Tom Still
Matthew Gonnering, the chief executive officer of Widen Enterprises, isn't the kind of boss who wants his employees to go without health-care coverage. If nothing else, he explained at a recent gathering, offering health insurance helps attract and retain the kind of talent necessary to run his tech-related business.

However, rising health care costs and the advent of the federal Affordable Care Act combined to make things more complicated for Gonnering and his team at Widen, a digital asset management company in Madison.

As Gonnering told a recent meeting of the Wisconsin Innovation Network, Widen was faced with a 12 percent rate hike in 2014 for its existing coverage, modifying its coverage to share some costs with employees, or ending company-sponsored coverage and letting workers fend for themselves on the federal government's health insurance marketplace "exchange."

In the end, Gonnering said, the company elected to keep its existing coverage plan with employees sharing in premium payments – something they didn't pay in the past. That will continue for at least one year while the company waits for the small business side of ACA, or "Obamacare," to sort itself out.

"We felt we could remain competitive with employees, in addition to the wellness plan that we had… without having those employees get nervous or worry about switching jobs," he said.

That story is typical for small businesses across Wisconsin and the United States as the Affordable Care Act inexorably begins to change how those companies, and millions of individuals, shop for health care coverage. As 2013 rolls to a close, many wonder: What's our next step if we want health care coverage in the year ahead?

The answer depends a great deal on the size and current coverage plan of your company – and whether you're a one-person shop.

Al Wearing, the chief insurance officer for Group Health Cooperative of South Central Wisconsin, spoke at the same WIN meeting. While he wants federal health-care reform to work over time, Wearing said it may be better for some employers to err on the side of caution before embracing a change that could confuse or even harm their employees.

The federal website for the ACA, http://www.healthcare.gov, appears to be functioning well after a dysfunctional start, but Wearing said many small business owners may still elect to "stay on the sidelines" and accept renewals of current coverage while the law's small-business mandates get worked out.

The story is different for individuals, especially those who lack coverage now. They must sign up by Dec. 23 through the website if they want coverage beginning Jan. 1, 2014, said Barbara Zabawa, head of the health care law team for Whyte Hirschboeck Dudek in Madison.

So far, the federal government has not delayed the individual requirement. That means uncovered individuals who do not sign up by March 31, 2014 will face federal tax penalties that will grow over time. For uncovered people who don't sign up for coverage by March 31, the penalty is $95 per adult or 1 percent of annual income, whichever is higher. That penalty grows in succeeding years – and the sign-up periods will be more sharply defined.

For entrepreneurs and sole proprietors who aren't covered today, Zabawa said, checking out http://www.healthcare.gov makes sense because it can match people to a coverage plan.

"It's really going to depend on their income and where they live," Zabawa said. "In many cases, they may find themselves pleasantly surprised about available coverage plans."

Zabawa agreed the new law is more complicated for businesses. The ACA's Small Business Health Options Program is open to employers with 50 or fewer full-time employees, but deadlines tied to small business coverage have been extended. Most businesses with more than 50 employees cannot use SHOP today, but it will be open to employers with up to 100 full-time employees in 2016.

A word of caution: If you're eligible for job-based insurance, you can still consider switching to a federal marketplace plan. But you won't qualify for lower costs based on your income unless the job-based insurance is unaffordable or doesn't meet minimum standards. You also may lose any contribution your employer makes to your premiums.

The bottom line: Small businesses may be able to improvise in 2014, but uncovered individuals and one-person shops may want to "insurance shop" now. Consider it a new angle on the online holiday buying season.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

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