Enrollment specialist Laquanda Jordan helps Narendra Parmar sign up for insurance under the Affordable Care Act in Miami. (Joe Raedle / Getty Images)
Many Michigan businesses expressed frustration with the Obama administration’s decision Monday to delay by another year a mandate requiring smaller employers to give workers health care coverage.
The administration’s directive will give businesses with 50 to 99 employees — about 96 percent of all small business in the U.S. — until Jan. 1, 2016, to provide insurance for their workers. The delay does not affect businesses with 100 or more employees; they are still required to meet a Jan. 1, 2015, deadline to provide coverage, although other changes were announced to ease their transition.
The rule change will help small businesses ease into Obamacare, the administration said. But critics said most businesses with 50 to 99 workers already provide insurance. And those new to providing benefits have already spent hours, days and weeks choosing policies that might not be an option next year.
Congressional Republican leaders accused President Barack Obama of improperly rewriting the requirements of the 2010 federal law.
“Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandates of his health care law,” House Speaker John Boehner, R-Ohio, said in a statement. “If the administration doesn’t believe employers can manage the burden of the law, how can struggling families be expected to? ... We need fairness for all, with relief from ObamaCare for every American.”
It’s the second time the Obama administration has delayed the employer mandate. As originally written, the Affordable Care Act required all businesses with 50 or more workers to get them insured by Jan. 1, 2014, but the White House last year delayed that deadline by one year.
The reaction of business groups was mixed.
“These final regulations secured the gold medal for greatest assistance to retailers, and other businesses, and our employees,” said Neil Trautwein, a vice president of the National Retail Federation.
Others were more guarded in their appraisal.
“I’m not disappointed, but at the same time it throws that element of uncertainty back into the market,” said Scott Lyon, vice president of the Small Business Association of Michigan. “They’re all ready (to meet the previous deadline) and now they’re confused — so they don’t want to make any decisions.
“It’s ‘hurry up and wait.’ ” (Employers) have wasted a lot of their time and a lot of their money trying to figure out how many full-time equivalents they have. Workers might have been making decisions about whether they’re going to be insured through their company or on the private market. (And) it has an impact on insurers.”
Don Hazaert, director of Michigan Consumers for Healthcare, the statewide “navigator” charged with helping people sign up for insurance, said he hasn’t yet reviewed the rule change — but the sooner people sign up the better. The larger the pool of residents insured by Obamacare, the more healthy people there will be to balance out the cost of insuring the sick and elderly. That means the larger the insurance pool, the lower insurance rates will be.
“We would like to get to full implementation as soon as practical,” Hazaert said. “The sooner we can get buy-in from big business, large employers, the sooner we’re going to see the really big benefits from the ACA, the cost savings.”
Under the new rules announced by the U.S. Treasury Department, employers with 100 or more workers can avoid paying penalties as long as at least 70 percent of their full-time workers are insured by the 2015 deadline. They have until 2016 to insure up to 95 percent.
But Andrew Brogan, an insurance agent and partner at East Lansing-based Brogan, Reed, VanGorder & Associate, said the delay for small businesses doesn’t provide enough relief.
Under Obamacare, businesses with less than 50 employees are not required to provide insurance for their workers, but many do. And Brogan said he’s seen rate increases in the small group market that are “crazy high.”
“We service over 650 clients (and) we’re for any delay that they’re willing to give us,” Brogan said. “But the sad thing is that the real impact has already happened with the small employers in the under-50 market.
“We’re getting (some firms) that are (seeing) 40 to 100 percent increases. Some business owners will be so fed up with the type of increase they’re getting that they’ll chose to increase the employees wage and have them go get their insurance through the health exchange,” he added.
Charlie Owens, state director of the National Federation of Independent Business of Michigan, which bitterly opposed the Affordable Care Act, said the rule change was politically motived.
“It’s our viewpoint that this is a move by the Obama administration to avoid another cancellation avalanche before the mid-term election,” Owen said, referring to millions of policies canceled by insurance companies in late 2013. Obama came under attack for having repeatedly said consumers would be able to keep their previous insurance plans under Obamacare.