Introduction to the Affordable Care Act, Part 3

A healthcare longitudinal survey by the NFIB Research Foundation 2015 

NFIB’s Research Foundation issued new research based on a survey of 900 small business owners and operators from around the country. This is the third segment of the three-year longitudinal look at how the healthcare law will impact the small business community. (See part 1 and part 2.) 

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Executive Summary

  • As of July 1, 2015, employers who offer reimbursement for employees’ individual market health insurance can be fined $100 per day, per employee or $36,500 per employee, per year. Currently, 16 percent of small employers are in violation of the new rule and are subject to the steep fines. Another 20 percent of small employers are considering or seriously considering offering the prohibited benefit.
    16% of small businesses can be fined by government over healthcare
     

  • The healthcare law has not provided any insurance premium cost relief for most small offering employers. In fact, 63 percent of offering small employers experienced an increase in their per employee premium cost between mid-2014 and mid-2015. Only 8 percent reported an average decrease in insurance premiums and 27 percent saw no change.
    2/3s of small businesses see insurance cost increases
     
  • The cost of health insurance continues to be the principal reason that small employers do not offer the benefit. Of the 60 percent of small employers who do not offer health insurance, 52 percent say that cost is the reason they do not.
    High costs are main reason small employers don't offer health insurance
     
  • Fourteen percent accessed the individual exchange marketplace website and only 3 percent were interested in the SHOP exchange marketplace. Nine percent visited the website for both individual and business insurance. However, the majority (66%) of owners were not interested in either, the same as last year (Q#76).
    Most small biz haven't visited healthcare.gov
     
  • About 41 percent of small employers are personally covered by an individual market health insurance plan, up 11 percentage points from 2013. The percent of owners covered through their spouse or the business (17% and 33% respectively) has remained relatively stable in that time frame (Q#6).
     
  • Twenty-eight percent of owners personally covered by an individual market health insurance plan purchased it through the government facilitated exchange. Of those who purchased in the exchange, about 57 percent received a taxpayer subsidy that reduced their overall premium cost. About 42 percent did not receive a reduced rate, and paid for the entire amount of the health insurance premium (Q#8).
     
  • About 80 percent of small employers are familiar with the law. Of those who are familiar, 29 percent consider themselves very familiar with it and 51 percent somewhat familiar (Q#72). The level of familiarity does not differ based on whether the employer offers health insurance or not, but does by firm size.
     
  • The percent of small employers offering health insurance changed little over the last year with 41 percent offering the benefit, a 1 point increase from the 2014 survey but 5 percentage points lower than in 2013 (Q#17).
     
  • The rising cost of health insurance requires small business owners to decide how best to absorb those costs. The most frequent action taken by owners (54%) experiencing higher health insurance costs was to increase productivity and efficiency. The second most common action was to accept lower profits. (Q#50) Fifty-two percent of owners paid for higher costs through lower profits.

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