Over the past few years, millions of Americans may have wondered how the various aspects of the Patient Protection and Affordable Care Act would end up impacting them, and that’s certainly true of small business owners. But now that the coverage mandate has been in effect for the full year, it seems that many smaller firms are starting to shy away from offering coverage.
For this year and next, about 3 in 4 small businesses that offered health insurance coverage to their employees in 2013 and 2014 may not be doing so in the near future, according to a new survey of owners in West and Southwest Michigan by Grand Valley State University. That number comes from roughly 1 in 4 reducing their offerings for 2015, while another one-half of respondents say they’re probably going to roll back coverage for 2016.
Meanwhile, many of the remaining owners aren’t exactly committing to ongoing coverage for their workers, the report said. Another roughly 1 in 6 firms say they haven’t made up their mind yet about 2015, with 28 percent responding similarly regarding next year. More than two-thirds of companies that do cut coverage say they’re going to encourage workers to seek plans through the federal exchanges instead.
“While, for the most part, larger employers are continuing to offer health insurance to their employees, many small employers are choosing to discontinue coverage,” said Leslie Muller, assistant professor of economics at GVSU, who conducted the survey in collaboration with Priority Health. “Just under three quarters of the surveyed companies who are discontinuing coverage in 2015 are going to encourage their employees to use the ACA public exchanges.”
Changes to the offerings
Meanwhile, 87 percent of all small businesses say they’ve already begun increasing the share of insurance costs paid by workers, or are at least considering such a move, the report said. That includes 73 percent that are either considering increasing deductibles or have already done so, and 67 percent which might do the same by changing the way they cover prescription drug costs.
Owners who want to streamline their companies for more success in the future as the ACA continues may want to consider the benefits of cutting costs for other types of small business insurance. For instance, finding more affordable liability insurance could free up thousands of dollars that can be used to cover health care costs instead.