Affordable Care Act

New Small Business & Obamacare: Research for 2015

Published on June 20, 2015


Small Business and Obamacare Health Insurance

Obamacare and Small Business Health Insurance – The Only Constant Is Change

Small business owners have to be resilient and agile, but the business climate can change in a heartbeat. The Affordable Care Act (ACA or Obamacare) has been a consistent form of change for small business owners for the last several years.
The underwriting rules, plan benefit structures and the tax code have all gone through change under the ACA, and more change is coming in 2016. And, as ever, we like to know how our change is impact our customers here at eHealth.

Has Obamacare Changed the Minds of Small Employers?

For the second time in three years, eHealth surveyed small business customers with fewer than 50 employees. We wanted to know why they’re offering health insurance to employees, when they’re not required to by law, and the costs are increasing faster than their profits.

Here are the results:

What is the primary reason you offer health insurance to employees?
2013 2015
Moral Obligation 44% 40%
Recruit Talented People 31% 34%
Workforce Productivity 8% 9%

In the 2013 and again 2015, we asked small employers, if they had considered dropping health coverage for their employees at some point within the next two years?

Here are the results:

Have you considered dropping health coverage for your employees at some point within the next two years?
2013 2015
Yes 40% 48%
No 60% 52%

Plans to Grow?

Starting 2014, the ACA also required employers with 50 or more full-time employees (or part-time equivalent) to offer coverage to all of their employees. Many have speculated that this requirement would discourage small employers from hiring employees to grow their businesses.
While the “employer mandate” has been delayed, concerns about employers dropping coverage have persisted so we asked employers about their long-term plans to add employees and grow their businesses.

Here are the results:


Does the Affordable Care Act (Obamacare) have any impact on your plans to hire employees and grow your business?
2013 2015
Yes 15% 48%
No 85% 52%

Changes Coming for 2016

Starting in 2016, the Affordable Care Act (ACA or Obamacare) is scheduled to redefine the small group health insurance market as the market for businesses with 50 or more full-time employees.
Currently, only those employers with 100 or more workers are subject to this classification.

Questions & Concerns About the Change

For the smaller businesses with 50 to 99 employees entering into this new classification, many likely have to change their existing health plans into a new plan that meets the standards of today’s small group market.
With tighter ratings restrictions and more mandatory benefits, many argue these changes will drive up prices in the short-run and could drive some employers to drop coverage for employees.
For tips and advice on how to be ready for these changes, read this article by eHealth’s director of small group sales, Anthony Lopez.

The Business Community Reaction

As you can imagine, many in the small business community oppose these changes so, in March 2015, the U.S. Chamber of Commerce and 17 trade associations asked the Department of Health and Human Services to delay them. The groups worked to have bills introduced in both chambers of Congress aimed at helping their cause: S.B. 1099 and H.R. 1624.
Chief among the concerns from business groups pushing these new bills is the concern that employers with 50 to 99 employees will stop offering health coverage to employees if prices continue to rise.

Survey Methodology

Our 2013 survey was conducted online on February 12-15, 2013, with a total of 259 respondents.  Our 2015 survey was conducted online on in May of 2015 with a total of 50 respondents.  Both surveys were sent to small business owners who purchased coverage through eHealth and who still had coverage in effect when the survey was sent.

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