For years, small business owner Douglas Ogden wanted to provide his employees health insurance, but just couldn’t afford it.
The Beverly Hills resident, who runs a dry cleaning business in West Hollywood with nine employees, knows the importance of having health insurance.
When he was diagnosed with central sleep apnea earlier this year – a condition that if left untreated could lead to heart disease and strokes — insurance companies flatly refused to cover him because of his pre-existing condition. It was quite by accident, he said, that he found out about California’s Pre-Existing Condition Health Insurance Program, a stopgap program under the Affordable Care Act (ACA) that offers health insurance at an affordable cost. He enrolled in it.
Starting January 1, when the ACA is fully implemented, insurers will be banned from denying health insurance to anyone with a pre-existing health condition.
“But I am still not able to provide employer-sponsored insurance to my employees because of the cost of coverage for individual plans,” lamented Ogden who has been operating dry cleaning businesses in different parts of Southern California for more than two decades.
Last month, he was among the state’s small business owners that lauded the announcement by Small Business California that come Jan. 1, 2014, Covered California, the state’s online health insurance marketplace, will offer choices of health insurance to small businesses and keep premiums in check.
“For nearly a decade, increasing health care costs have been the top concern for California’s more than 3 million small business owners,” said Scott Hauge, president of Small Business California. “The plans and prices announced today should help control costs and put health insurance within reach for many.”
Under the Small Business Health Options Program, or SHOP, California businesses with 50 or fewer employees will be able to choose from one of six plans. The employer will pick a level of coverage and employees can pick any plan at that level.
While rates vary by region, premiums are generally comparable to 2013 small-group rates, according to Covered California’s executive director Peter Lee. They can even save small businesses money on their premiums. Lee called the rates “a game leveler.”
“Covered California is offering plans that will encourage thousands of employers to participate, ultimately increasing the number of insured Californians,” said Lee, “which is the mission of the landmark federal law.”
The SHOP will provide small business owners with a single, consolidated bill to help minimize the time and paperwork employers often face when providing health coverage for their employees.
The SHOP is part of an important effort to control health care costs. The U.S. Department of Health and Human Services recently evaluated proposed insurance premiums in six states, reporting that prices for small business plans in those states have come in an average of 18 percent lower than the premiums employers were paying prior to the ACA.
While small businesses are not required to provide health insurance under the ACA, those that do may be eligible for subsidies to purchase it, said Lee, starting now. It is currently 35 percent and goes up to 50 percent of the premium on January 1.
Ogden said he is “cautiously optimistic” about last week’s announcement.
“I am concerned about the Affordable Care Act and the SHOP program being watered down and delayed by the Republican- controlled Congress and special interest groups like the Chamber of Commerce, who have historically been vehemently opposed to employer-mandated health insurance and worker rights in general,” he said.
“I have experienced first hand what my employees are faced with worrying about on a daily basis: the threat of financial ruin by a catastrophic health incident due to lack of insurance.”
To learn more visit www.healthlawguideforbusiness.org.