With more than 250,000 Coloradans enrolled in private health insurance or Medicaid through Connect for Health Colorado, it’s clear how the Affordable Care Act has changed the health care landscape for individuals.
Changes in health care in have also made an impact on small businesses, especially for one Colorado business that dropped group health insurance in favor of helping employees find their own.
Steven Stark, managing partner for Stark Schenkein, a Denver accounting firm with 15 employees, says the company faced a serious challenge in 2013.
“Health care costs were going up," Stark says. "We had figured that with Obamacare it was going to continue to go up at a quicker clip.”
For years, the firm had offered employees health care coverage with the company fully paying health insurance premiums for each employee.
After the company’s premiums skyrocketed to $80,000 last year, Stark says the firm decided to explore options with an insurance broker and find an alternative solution.
"That’s when we came up with this plan,” Stark says. “We got rid of the group plan.”
Stark Schenkein opted to not use Colorado’s exchange but instead paid employees several hundred dollars a month to buy insurance on their own through a designated broker.
Through the designated broker, employees could access new plans from a variety of carriers both on or off the exchange.
“It was not pretty for a couple of months,” Stark Schenkein Office Administrator Vicki Bramble says. Bramble helped usher the firm through the transition and signed up for a new plan for herself.
Bramble says that despite the challenges she’s happy with her individual health coverage plan.
For other employees there were glitches, things like some not getting enrollment cards or payments not going through.
“Sometimes you called the insurance company," Bramble says. "They had never heard of you, they didn’t have your paperwork.”
Bramble says some employees ended up paying a little more, some a little less, than the company stipend. The stipend is based on an employee’s compensation and ranges between $200 and $1,000 a month.
Bramble settled on a plan with a high deductible and smaller out-of-pocket costs to pay roughly $100 a month.
“I’m happy to have health care coverage," Bramble says.
While Stark Schenkein employees adjust to new coverage, many others are in limbo because of the Affordable Care Act, according to Tony Gagliardi, the Colorado director with the National Federation of Independent Business, which has 7,000 members in Colorado.
“Right now, this is just a mess,” Gagliardi says. “It is a train wreck because of the uncertainty that it’s caused."
Gagliardi says the rough rollout of the Affordable Care Act has destabilized the insurance marketplace and now many companies simply don't know what to do about employee health insurance.
“I think it’s bad because it just adds to the uncertainty on Main Street," Gagliardi says. "Uncertainty in public policy just creates problems.”
Wright Group CEO Bryan Wright leads a Denver-based firm that helps companies choose employee benefits plans and says 10 percent of 300 clients dropped group coverage over rising costs.
Wright also adds that some businesses are doing this knowing employees won’t be denied coverage.
“The cost has become so prohibitive that they’re having to make other choices," Wright says. "I think this is now an environment where employers are able to moralistically drop a health plan knowing that their employees can get covered elsewhere.”
The Colorado Health Institute, a non-partisan research organization based in Denver, tracks health trends.
Jeff Bontrager, the group's Director of Research on Coverage and Access, says many small businesses and employees don't qualify for tax incentives through the state's health exchange. Because of this, many opt to renew existing plans to buy time to decide what to do about employee health coverage.
“The takeaway for me is that we’re just going to need to wait and see over this next year," Bontrager says. "I think 2014 and 2015 are going to be very important years to monitor the impacts of the Affordable Care Act on employers.”