Here’s a brief look at “Trumpcare” and what it means for small business owners.
eHealth Survey Finds Small Employers Twice As Likely to Have A Positive View of President-Elect Trump’s Potential Impact on Their Health Insurance Costs
In This Article:
- Survey results: What do small employers expect from Trump’s health care agenda?
- Will Trump repeal Obamacare?
- The short-term implications of an Obamacare repeal on small business
- The long-term implications of an Obamacare repeal on small business
- What are defined contributions?
FACT: Most Small Employers Provide Health Insurance To Employees
Our survey shows the number-one reason small business owners provide health insurance for their employees is out of sense of moral obligation1 , even though many struggle with the cost of providing health coverage.
When the Affordable Care Act (“Obamacare”) became law in 2010, many people feared that small business would stop offering health insurance to employees, but those fears were largely unrealized.
Now, with the election of Donald Trump to the presidency of the United States, the future of the Affordable Care Act (“Obamacare”) is in doubt.
Small Employer Expectations for President-Elect Trump’s Health Care Agenda
A new survey of eHealth customers found that a majority of small business owners (53%) said the election would have no impact on their decision to offer employees health insurance; 39% said they expected president-elect Trump to have a positive impact on their health insurance costs.
By comparison, nearly one-in-four (23%) small business owners do expect the president-elect to impact their decision to offer health insurance to employees; 20% expect president-elect Trump’s impact on their health insurance costs to be negative.
Advice for Small Employers
What should small business owners expect when it comes to health insurance under a Trump administration? Let’s take a brief look at potential “Trumpcare” proposals and what they might mean for small business owners.
Will President-Elect Trump repeal the Affordable Care Act (Obamacare)?
It is very likely that the law will be repealed or at least partly dismantled.
Donald Trump made the repeal of Obamacare one of the primary goals of his campaign for president. With Republicans in control of both the House of Representatives and Senate in 2017, he doesn’t have much opposition to doing just that. Even if Republicans cannot get the votes to fully repeal Obamacare, they can probably get enough votes to make parts of the law inoperative by denying funding needed to make the law work.
Fans of the ACA will be pleased to know that he appears to want to retain some of the more popular provisions of the Affordable Care Act, while allowing other less popular aspects – like the tax penalty for not having health insurance – to lapse.
What’s coming in 2017? How would a repeal of (Obamacare) affect my business?
The short-term answer is, “not much.”
Under the current law, most small businesses with fewer than 50 employees generally are not required to offer employees group health insurance coverage – Obamacare didn’t change that.
Obamacare did require larger employers with 50 or more full-time workers (or the equivalent in part-time workers) are required to provide Obamacare-compliant coverage or face a possible tax penalty.
Most of the ideas being discussed by Republicans to replace the Affordable Care Act would likely not require any employer to offer health insurance coverage – regardless of their size.
What’s happening beyond 2017? How would the repeal of Obamacare affect my business long-term?
Long-term changes could be much more significant.
Some of the Obamacare replacements proposed by Republicans would allow for what’s called a “defined contribution” model.
A defined contribution model would allow small businesses to provide employees with a defined dollar amount on an annual or monthly basis that the employee can use to buy their own health insurance plan.
This might satisfy small business owners’ sense of moral obligation to help employees afford health insurance, without he burden of trying to pick a single plan that’s right for all of their employees.
Under a defined contribution model, a small business owner may (for example) offer each employee $100 per month to be used toward an individually-purchased health insurance plan.
Employees could then go to an online health insurance marketplace like eHealth and shop from health insurance from different plans available in their area.
Here are a couple other ideas being batted around:
- Auto-enrollment in health insurance – At least one Republican proposal would allow for small businesses who offer group health insurance coverage to automatically enroll new employees in health insurance at the time of hire. Employees would be able to opt out of coverage if they chose, but the auto-enrollment model would encourage more people to sign up for coverage and potentially spread risk across a broader employee group to keep costs in check for everyone.
- New tax incentives for small businesses – Many small businesses today offer group health insurance coverage not because they’re required to, but because they feel it’s their responsibility or because it helps them to hire and retain the best workers. Small businesses who offer health insurance typically deduct their contribution to employee premiums from their business taxes. Under some Republican proposals, small businesses would be offered additional tax incentives to implement defined contribution or auto-enrollment models, in order to encourage more workers to get the health insurance coverage they need, whether group health insurance or individually-purchased coverage.
The future of health insurance in the United States
When it comes to health insurance in the United States, everyone will know more about what the future holds sometime in 2017. Republican proposals to date are simply the starting points for debate that will likely take some time to resolve.
In the meantime, eHealth recommends that all small businesses consider a group health insurance plan. Licensed agents at eHealth are available to help small business owners understand their coverage options and help them and their employees enroll in coverage, at no additional cost.