ACA Is a Bane to Smaller Companies

Those with revenue of $10M to $50M would benefit if the law were replaced, says a small-business adviser.
JoAnn LaingDecember 15, 2016
ACA Is a Bane to Smaller Companies

For many small businesses, plans regarding health-care benefits are tinged with uncertainties entering Donald Trump’s presidency. What is certain is that, absent significant changes, the Affordable Care Act must be repealed.

JoAnn Laing

JoAnn Laing smaller companies

In the run-up to the presidential election, no matter who was elected, many smaller company leaders were unsure whether the ACA was going to be eliminated or which provisions were going to be changed. This left many companies, particularly those in the $10 million to $50 million revenue range, on the sidelines, waiting for greater certainty before committing to and implementing longer-term, conforming makeovers to their health-care coverage.

Post-election, given the known opposition to the ACA by President-elect Donald Trump as well as Republican congressional leaders, substantive changes are expected.

Given the many convoluted provisions that mark the ACA, perhaps the best solution is total repeal, as changes affecting any particular provision of the law may also affect other provisions.

Should total repeal not be possible, surveys and focus groups conducted by Information Strategies, Inc. (ISI) suggest several provisions that appear to be the most important to change or eliminate:

  • Allow one health-care policy for all employees no matter what state they are domiciled in. This is the first step toward allowing all health insurance to be sold nationally, not just state-by-state.
  • Reduce the number of mandated requirements for group health-care programs to decrease overall costs. For instance, not every employee needs pregnancy coverage.
  • Permit employees to purchase gap health-care insurance with consumer-directed healthcare (CDH) funds, in order to better protect themselves against catastrophic illnesses or accidents.
  • Simplify regulations to ease the need for outside counsel and consultants.
  • Waive/get rid of penalties for companies that do not comply with ACA requirements, creating a voluntary set of minimum coverage standards.
  • Increase the HSA contribution limit for families to a minimum of $10,000 and allow increased contributions to match increased premiums. In other words, if annual premiums increase by 10%, contributions should be able to increase at the same rate so as to keep the HSA fully funded.
  • Reduce or eliminate the so-called “Cadillac Tax” on high-cost health-care benefits packages and replace it with the ability to vary plan terms by employee categories or salaries
  • Allow for different levels of health-care insurance for part-time workers, and make identification of these workers more employer-friendly.
  • Create more flexible methods to provide employees with stipends, in lieu of health-care programs, with which to purchase insurance of their choice, such as from health-care cooperatives.
  • No longer permit prior medical conditions data to be used when assigning risk vulnerability to premium rates.

Generally, smaller companies want lower health-care costs without a reduction in the quality of care, which can be achieved by offering CDH plans and most particularly HSAs. For companies in the $10 million to $50 million range, having employees more involved in the financial side of the health-care services area can reduce overall costs.

JoAnn M. Laing is chairperson of Information Strategies, Inc., which has served the small business and health-care sectors for 18 years through multiple online channels and books (“Small Business Guide to HSAs” and “Recalculating”). She has also created and chaired White House conferences on health savings accounts.