Health-care uncertainty worries Duluth business ownersSome people don’t know what to expect for their business when provisions of the Affordable Care Act take effect in 2014.
By: John Lundy, Duluth News Tribune
Sherry Daeda doesn’t know what to expect for her small business when provisions of the Affordable Care Act take effect next year.
After spending Tuesday morning with many other local business leaders and some of the state’s top experts on the act, she’s no more certain.
“It’s just kind of a hit-and-miss thing,” said Daeda, the owner of Northland Heating, Cooling and Plumbing. “They’re just going to go in there and see how it works and adjust it as they go along, and we’re going to pay the tab.”
Daeda has five core employees and hires members of Sheet Metal Workers Local 10 and Plumbers and Pipe Fitters Local 11 as needed. The arrangement works well, and she enjoys a good relationship with the unions, she said. But she doesn’t know at what point the government will require her to provide health insurance for those workers or face financial penalties. She has discussed the question with the unions and with her accountant, Daeda said, and no one seems to know.
On Tuesday, she put the question to Nancy Libersky, director of the Minnesota district office of the Small Business Administration, during a Duluth Area Chamber of Commerce-sponsored forum at Valentini’s restaurant. Libersky acknowledged that she didn’t yet know the answer to Daeda’s question. She promised she would find answers to people’s questions, but also cautioned the information she’s getting from her superiors is fluid.
“We have been coached weekly,” Libersky said. “But things change weekly.”
After the Chamber group packed the Valentini’s dining room for the one-hour forum featuring Libersky and Minnesota Human Services Commissioner Lucinda Jesson, most moved on to pack a conference room at the Inn on Lake Superior for a longer educational session.
Both focused on the health reform that Congress passed in 2010 and specifically the online insurance marketplace, also known as the health insurance exchange, which will debut across the country on Oct. 1. In Minnesota, one of 17 states that is running its own exchange, it’s called MNsure. After the three-month signup period, the plans will begin on Jan. 1.
Nine insurance carriers made the mid-May deadline to submit proposals for MNsure to the state Department of Commerce, which is in the process of evaluating them.
Jesson, who is one of the seven members on the MNsure board, said it’s expected to be the source of health insurance for 1.3 million Minnesotans by 2016. She’s confident it will be ready to go by Oct. 1, Jesson said, and she promised it will be better than the federal version that will be the only choice in a majority of states.
But it won’t be flawless, she said.
“There are going to be some hiccups,” Jesson said. “This is not just going to happen painlessly and seamlessly.”
The uncertainty has Chamber members, more than 80 percent of whom run small businesses, expressing nervousness.
“The Affordable Care Act scares me to death,” said Rod Saline, co-owner of Engwalls Florists, Greenhouses and Garden Centers since 1991. “Talk to me about fines. They scare me to death.”
Businesses with 50 or more employees will face penalties — the SBA calls them “employer shared responsibility payments” — if they do not provide a basic level of affordable health insurance to their employees, Libersky said. Businesses with fewer than 50 employees, on the other hand, may be eligible for tax credits offsetting some of their insurance cost, she added.
But small businesses already get tax credits for offering health insurance, said Natalie Peterson, a broker for Otis-Magie Insurance Agency. Beginning in 2015, they’ll lose that credit unless they purchase it through the health insurance exchange.
“I think that’s unfair,” Peterson said. “I think that’s forcing them into the exchange.”
But Libersky said the exchange was set up to give people better choices. “It’s there to help you, not hinder you,” she said.