Small business advocates plead for better access, cheaper plans, fewer regulations

Small businesses are not forgotten entities during Congress’s quest to repeal and replace the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). In a hearing entitled Reimagining the Health Care Marketplace for America’s Small Businesses, the U.S. House of Representatives Committee on Small Business sought testimony from representatives of three business groups and one researcher in order to better understand the struggles small businesses face in the health care marketplace.

National Small Business Association. Tom Secor, a small business owner who serves on the Board of Trustees of the National Small Business Association (NSBA), spoke of his desire to reward his hard-working employees with the benefits they deserve. He noted that the NSBA’s members rank health reform as a high priority concern while operating their businesses and believe that offering coverage as a benefit is important for recruiting and retaining quality employees, but many small business owners are unable to afford plans. NSBA surveys revealed that 90 percent of business owners experienced an increase in health plan premiums at their most recent renewal. Secor was originally forced to choose to discontinue coverage for his employees in late 2014, but was offered the option to delay movement to an ACA plan. He said that each year, they hope for an extension in order to maintain their current plan and offer the benefit to employees by covering at least 70 percent of their coverage costs. Despite the benefit, some employees decline coverage due to the cost burden.

The NSBA recommends strengthening the individual mandate while removing the employer mandate, using 5-to-1 rate bands, improving subsidies, working to lower health care costs, addressing waste in health spending, and reforming basic benefit packages.

National Association for the Self-Employed. Keith Hall, President and CEO of the National Association for the Self-Employed (NASE), reminded committee members that self-employed individuals and micro-business owners do not receive the same tax benefits as other businesses because they cannot deduct their premiums, and many do not qualify for ACA subsidies. This unfavorable tax treatment impacts affordability along with rising premiums, but Hall and the NASE are not just concerned about cost. Association members have reported a number of access issues, including increasing wait times, smaller provider networks, and losing access to a long-time family doctor. Hall’s suggestions for improving accessibility included job training and increased reliance on non-doctoral medical professionals.

National Federation of Independent Business. Kevin Kuhlman, the Director of Government Relations for the National Federation of Independent Business (NFIB), believes that small businesses were “clearly an afterthought” during the ACA’s development. Although he admits that health coverage cost issues for small businesses existed prior to the ACA, he argued that the law made the problem worse. He also focused on the increased compliance burden for small businesses due to the number of regulations created under the ACA, which he stated spanned 227 pages for the employer mandate. This regulatory burden, combined with a lack of flexibility in plan offerings, has placed small businesses in a difficult position when navigating the provision of benefits.

Georgetown University research. Dania Palanker, an assistant research professor at the Georgetown University Center on Health Insurance Reform, testified that in her personal opinion (and not as a representative of the university), the ACA improved the small business health insurance market by removing barriers to negotiation and reducing administrative costs. According to Palanker, small businesses struggled with cost issues for decades before the ACA, and employees of small businesses paid more for less coverage than those employed by larger businesses. She also noted that ACA requirements resulted in mandatory maternity coverage and essential health benefits. In addition to the improved minimum standards of coverage, she believes that the ACA improved the small group insurance market by strengthening protections for consumers.

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