As small businesses grapple with the glitchy Healthcare.gov, many U.S. employers are facing tough decisions about health care.
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While the employer mandate was delayed until 2015, many small businesses are already being hit with rising costs and other fees associated with ObamaCare. In New Hampshire, New England College CFO Paula Amato says her insurance provider initially proposed a 25% increase for renewals this year. The private college offers two plans to its 250 full-time employees.
“This year, we were able to negotiate a 12.5% increase,” says Amato. Amato says 2.5% of the fee increase is directly tied to the Affordable Care Act to help with the cost of the exchanges.
In addition to rising costs, Amato says ObamaCare will force the school to cut hours for approximately 75 of its 150 adjunct professors, to make sure they don’t reach the 30 hours per week that would qualify them for health care.
“We could not afford to provide benefits to all of them,” says Amato. She says that adjuncts who teach three or four classes a semester will see their course-load slashed.
Health Care Seen as a Must-Have
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In New Haven, Conn., Chameleon Salons owner Stan Bialecki says offering health insurance to his 20 employees is good business.
“I think it’s the right thing for us to do as a company, and it gives us a huge competitive edge over other businesses,” says Bialecki, who says some of his talented senior staff would likely have left years ago, were it not for the benefit offerings.
Bialecki says the salon picks up a percentage of the cost for its employees – as much as $700 per month for some of the older workers. In total, he says the salon spends nearly $60,000 per year on health insurance.
“I’m scared as hell,” says Bialecki, who says he has yet to receive notice about his plan’s increases this year. Last year, Chameleon’s Anthem policy increased by 20%; Bialecki says the additional cost wasn’t passed on to staffers.
“I’m really afraid that they’re going to price us out of our ability to absorb the cost,” says Bialecki.
Even though Chameleon picks up part of the bill, Bialecki says some employees don’t take advantage of the health-care coverage offered because of the cost – and when they checked out their options through Connecticut’s individual exchange, they were sorely disappointed.
“Some of my employees who don’t have insurance checked it out and said it was a disaster. The rates were more expensive than our subsidized plans were,” says Bialecki.