Ideastream’s Sarah Jane Tribble took a look at how small businesses that voluntarily cover their workers could be in for some premium shocks.
She focused on Paul Siperke, co-owner of Fat Head’s, a Cleveland brew club. It’s a small business and, with fewer than 50 employees, there is no requirement to cover workers. But the owners do voluntarily.
And the costs keep rising – sometimes double digits, sometimes only as little as 3 percent.This year, Tribble reported, rates soared by 20 percent under the ACA, even though most of the workers are young and healthy.
She explains why:
Until now, if employees were healthy and claims were few (as they are at Fat Head’s), the company’s cost of insuring those employees was relatively low. But, for a small business, if even one employee was in a car accident or was diagnosed with cancer, the amount the insurance company charged the firm to cover those employees could skyrocket the next year. The insurance industry called this “experience rating,” and it is changing under the health law, says Steve Millard, who heads a small business association in Cleveland.
If you’re a really healthy company and have a really good rate relative to everybody else today, you’re probably going to pay a lot more for insurance [going forward],” he says, but, “on the flip side, if you have chronic conditions and difficulties, and an older workforce and are paying a lot more, you’ll probably see some benefit in health care reform.”
In the long run, costs may stabilize. But as the system transitions, many small businesses will see premium hikes.
The specific business that Tribble profiles is going to weather the transition – though they aren’t happy about it. Siperke says he can afford it for now, and that he supported some kind of Health Policy. But, he added, “It just seems like … they botched it.”
The story was part of a reporting partnership that includes NPR, Ideastream and Kaiser Health News. Read it here: or listen here:
