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What Health Care Reform Means For: Small Businesses

Using results from a questionnaire we did with American Public Media’s Public Insight Network, we’re looking at how the proposed health care reforms will actually affect people facing common health care coverage situations. This is the second in a series (Part 1, Part 3).

Fairfield Lighting and Design, Office Manager Barbara D’Agostino

Location: Fairfield, Conn. Employees: 12 (10 receiving health insurance) Sales: $2 million annually Payroll: $384,000 annually

Their story:

Fairfield Lighting and Design has been in business since 1972, but it is struggling to cope with tough economic times. It has 12 employees, whose average wage is about $20 an hour. Because of the recession, opportunities to work overtime have dwindled, and the regular hours of some employees have been cut.

The recession has also made it difficult to keep paying their health care costs: Fairfield offers health insurance to 10 of its employees, at a company cost of $550 per employee each month.

The costs to each employee are relatively low. They pay only 20 percent of the premium, or $110 per month. Their co-payments are $15 to see a doctor or $500 for a hospital, and medications cost them $15, $25 or $50, depending on the type of drug.

But that could change. Fairfield Lighting and Design was recently notified that its coverage will be taken over by a new company, probably around the beginning of the year.

“Hopefully when this whole thing goes through maybe we can find something less expensive,” D’Agostino said. “Otherwise the employees may have to contribute a bit more.”

What health care reform would mean for them:

Two of the reform bills require that employers provide some minimum health insurance to employees or pay a penalty. The exception is the Senate Finance Committee bill, which has no employer requirement.

But small businesses are exempt. Because Fairfield Lighting and Design has only 12 employees and a payroll of less than $500,000, it would not be required to provide health insurance under any of the health reform bills.

Each of the three bills gives small businesses tax credits for several years to provide relief from high insurance premiums until more comprehensive reforms are in effect – until 2015 for the House bill, and 2017 in the Senate Finance bill. The Senate health committee bill would offer a credit until state exchanges are up and running -- up to three years. But some plans offer a lot more help than others. The health committee bill would offer Fairfield a tax credit of about $10,000 per year. The others use sliding scales based on employee income, and because Fairfield pays near the top of those scales, it would get a credit of only about $5,000 under the House bill and $2,500 under the Senate Finance Committee bill.

Small businesses would also have the option under all three bills to buy insurance through a health insurance exchange, a pooling mechanism that would allow them to choose from a menu of private plans, which the Congressional Budget Office projects would be cheaper than private plans currently out there for small businesses.

Help won’t arrive right away under any of the proposals. The House bill, which phases small businesses into the exchange based on their size, would make Fairfield wait until 2013. The Finance Committee plan would make Fairfield wait even longer – it won’t set up exchanges for small businesses until 2017. The Senate health committee plan would authorize the Health and Human Services secretary to start giving grants to states to start up health care exchanges right away, but it is unclear how quickly states would move.

Gadema Quoquoi

Nov. 10, 2009, 9:26 a.m.

Healthcare Reform for Small Businesses, means Containing the Unsustainable Increases in Annual Insurance Rates.

If we, deployed/used HIT Solutions, we can Controlled the Rates Increases by Insurance Companies for Small Businesses. 

Properly Deployed Health Information Technology (HIT) Solutions, and Training can Increased Productivity (i, e, medical data mining/warehousing, risks treatment, service delivery), Efficiency (i, e, medical errors, redundant and inapprpriate care), and have a Costs Savings of around 20-30% of our Annual National Healthcare Expenditures ($2.4 Trillions).

The Engine of Economic Growth in this 21st Century is “Broadband.”  We can start by Deploying a purePacket-based, All Optical/IP, Multi-Service National Transport Network Infrastructure, using Ethernet throughout this National “Network of Networks.”  This new “Network of Networks” can then Connect all Optical Islands, Nationwide.

This type of Investment is like the Investments in the past, in Electrification of Rural Areas, and National Transportation Inter-State Highways, which Increased Productivity, and our GDP.

Also, the Investment in this Next Generation National :Network of Networks” can Serve as a Business Driver for:  e-Healthcare, e-Commerce, e-Education, Energy Systems, Transportation Systems, Social Networking, Entertainment, etc.

Please See:  http://www.gkquoquoi.blogspot.com for Summary Deployment Plan, for the Nationwide Health Information Network (NHIN).

Gadema Korboi Quoquoi
President & CEO
COMPULINE INTERNATIONAL, INC.

Boy, I wish I could find an employer that would pick up 80% of my health insurance costs - Even the highly touted Federal Employees Unions (Civilian) only pick up 65%. Fairfield is certainly generous. I think that Fairfield will need to ask their employees to contribute more, at least in the near future. That will be hard, but a financial reality. Although Congress projects lower costs for small businesses that choose to buy on an insurance exchange - no one really can guarantee what the costs will be yet.
This article really highlights the difficult financial decisions facing thousands of small businesses around the country right now and how these necessary decisions will be affecting even more thousands of their employees for the time being and well into the future. 
Donna Wetzler, CDPE, CNSA, CSP, GRI
Preferred Referral Realty

This article is part of an ongoing investigation:
Eye on Health Care Reform

Eye on Health Care Reform

The effort to reform health care stands to affect different people in many different ways.

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