1 | S m a l l B u s i n e s s a n d H e a l t h I n s u r a n c e : O n e Y e a r A f t e r E n a c t m e n t o f P P A C A
• One year ater passage o the Patient Protection and Aordable Care Act (PPACA), 42 percent o small employers –defned as businesses employing 50 or ewer people other than the owner(s) – oer employee health insurance. In thelast 12 months, 1 percent o oering small employers added health insurance as an employee beneft while 4 percento non-oering employers dropped it.• The number o small employers oering employee health insurance is likely to change little over the next 12 months. Virtually no small employer now oering expects to drop health insurance in the next year and virtually no non-oering employer expects to add it in that time rame.• Twenty (20) percent o small employers currently oering expect to signifcantly change their beneft package and/or their employees’ premium cost-share the next time they renew their health insurance plans. Almost all signifcantchanges expected involve a decrease in benefts, an increase in employee cost-share, or both.• Since enactment, one in eight (12%) small employers have either had their health insurance plans terminated or beentold that their plan would not be available in the uture. Plan elimination is the frst major consequence o PPACA that small-business owners likely eel.• Eighteen (18) percent o small employers think they are “very amiliar” with PPACA and another 40 percent thinkthey are “somewhat amiliar” with the new law.• By overwhelming margins, small employers who have some knowledge o the new law think that PPACA will
reduce the rate o health care (insurance) cost increases, will
reduce the administrative burden, will increasetaxes, and will add to the ederal defcit. They agree that PPACA will result in more people having health insurancecoverage, but do not think it will yield a healthier American public.• The principal actor explaining the PPACA outcomes that small-business owners expect is their current oer/non-oer status. Those oering employee health insurance are notably more pessimistic about the new law’s projectedoutcomes. Neither the degree o amiliarity with PPACA nor employee size-o-business is associated with theirexpected outcomes.• Low-wage employees, particularly those experiencing a large premium cost-share, have a powerul incentive to bolt anemployer’s health plan or the newly established and heavily subsidized exchanges. Should employees begin to leaveor an exchange, 26 percent o currently oering small employers are very likely to explore dropping their healthinsurance plans and another 31 percent are somewhat likely to do so.• A key actor in a small employer’s decision to drop a current health insurance plan will be the proportion o employeeswho leave their health plan or an exchange. Forty-three (43) percent report that a majority o employees would haveto leave beore they would drop their plan and 35 claim it would require all o them.• An estimated 245,000 (out o 5,228,000 employers with ewer than 25 employees) are eligible or a ull PPACA taxcredit. Another estimated 1.165 million are eligible or the partial credit.• The PPACA tax credit acts almost exclusively as a windall or small employers who currently oer health insur-ance rather than as an incentive to encourage its purchase. Considering eligibility and awareness issues, the ull creditincents, but does not necessarily change behavior, o only about 2 percent o small employers having ewer than 25employees.• Fity-seven (57) percent o small employers express interest in contributing to defned contribution-type health plans.Their interest assumes employees benefting rom their contributions receive equitable tax treatment compared tothat in employer-sponsored plans.