New bill helps small companies get health insurance

August 2, 2013 12:00:00 AM PDT
Under the Affordable Care Act, as of January 1 everybody will be required to have health insurance, through Medi-Cal, on their own, or through their employer.

Small companies, with less than 50 workers will not be required to provide insurance. But the new state program called SHOP will make it cheaper for those who do, and easier for those who don't already provide insurance to do so.

"I think the SHOP act is just one more opportunity for small businesses to be able to Offer health care to their workers," said Sarah Reyes.

Sarah Reyes is the Regional Director of the California Endowment. This nonprofit agency has been active in promoting the Affordable Care Act, and working with the state Agency Covered California, which is offering the SHOP program to small businesses.

"It's one opportunity for them to go to one place, be able to look at a variety of costs and to determine which the best for their business is," Reyes said.

The Small Business Health Options Program benefits employers with 50 or fewer employees. The advantages are a bigger plan selection, costs from 2 percent to 28 percent lower and the SHOP program handles all claims paperwork.

Employers with 25 or fewer employees who pay 50 percent of their employee's insurance premium would receive a 50 percent tax credit as a further incentive.

Sounds good but there's still skepticism. Fran Blackney of the Clovis Chamber of Commerce says business owners big and small are still confused and concerned.

"I will say the biggest problem right now is uncertainty because what came out yesterday may change next week," Blackney said.

And she doesn't think many small businesses around here will get on board.

"They just can't afford it. It's not that they are evil people they just can't afford it. It's just a cost factor you have to build into your cost of doing business," Blackney said.

But it is estimated about half of all small businesses with 50 employees or less do provide health insurance for their workers. Nationwide even 30 percent of employers with ten or less employees provide insurance coverage. But most small companies face higher rates.

The SHOP plan will allow them to become part of a larger pool and buy insurance at rates similar to what big companies pay.

Businesses can start signing up for the program on October 1. The policies will be sold through insurance agents who have been certified by the state's Covered California program.


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