The Affordable Care Act will have an economic impact on small businesses but it will depend on its demographic and number of employees.
About 40 employees work at Boley--Featherston Insurance in Wichita Falls. On Monday, many agents were busy doing last minute preparations before the health insurance exchange program kicks off online on October 1st. Agents were also busy figuring out how the changes will affect them.
Insurance agent Tom Wilson said the agency offers dependant health insurance coverage. That means the insurance could cover an employee's spouse and, or kids. However, some have chosen not to participate.
"Even though it's an affordable policy for the employee, the dependant cost for their wife and kids or husband and kids might be seven, eight or $900. They just can't afford to pay that," said Wilson.
Starting this January everyone will be required to have health insurance. If your spouse doesn't get coverage through their employer or they are unemployed, you're facing a tough decision.
"The public perception is well I will just go into the exchange and buy a policy for my wife and kids but if you have group coverage available through your employer, guess what? They don't qualify for a subsidy in the exchange," said Wilson.
The insurance agent said another thing that's affecting not just small businesses, but individuals as well is the age rating band. It spreads premium costs over a range of age groups to keep coverage affordable for everyone. Before the Affordable Care Act, the age band in Texas established that an older person's premium rate would be five times higher than the youngest employee. Now it puts it three times higher. Wilson said some small businesses might not be able to keep up with that change.
"Because of their demographics and the changes in the age banding or the modify community rating, they are experiencing those big rate increases. They might have to throw their hands up and say I can't do this anymore. They might have to give their employees money and say go buy it yourself," said Wilson.
The Small Business Health Options Program is set up to help small businesses economically and to help them understand how the Affordable Care Act works. You can click on this link to learn more about the program: www.healthcare.gov/small-businesses