Affordable Care Act's Effect on Small Businesses

Lynchburg, VA - It's been called the biggest political lie of 2013: President Obama's promise to Americans that if they like their current, private insurance plan, they can keep it.

We know now, of course, that's not true.

In fact, many private insurance plans are changing and costing more because of requirements under the Affordable Care Act.

Wistar Nelligan started Nelligan Insulation in 1999.

"I don't claim to be the smartest person in the world, but I don't mind working," Nelligan said.

After a lot of hard work, and the challenges of an up and down economy, Nelligan's company now faces one of its biggest challenges yet: changes to its health insurance, mandated by the Affordable Care Act.

"Everybody is confused and nervous about it," Nelligan said.

Nelligan likes providing healthcare for his employees, and says it's a good plan with good benefits. For him and his employees, however, everything will eventually change.

They've tried putting that off as long as possible, extending their current plan early. When their health insurance plan changes, though, to follow new premium rating requirements under the ACA, they expect their insurance costs to go up, perhaps as much as 20-40%!

"A 40% increase in our health insurance may mean that we don't provide health insurance anymore, that everybody would be on their own. They'd have to go to the exchange and get health insurance on their own," Nelligan said.

There are other challenges, too, like keeping up with all the paperwork required and the man hours to get it completed.

"It's been a nightmare, knowing what forms to send out that are mandated by the laws, explaining it," said Office Manager Donna Bubrick.

Nelligan has heard of larger companies having to hire extra staff, just to handle all the coming changes to health care in America.

Small businesses across the country are dealing with the same situation. A new federal report projects 65% of small firms will experience increases in their premium rates. That's 11 Million of the 17 million people who work at and get their health insurance through small businesses.

"We'll still have choices," said Earl Weaver of Weaver and Weaver Insurance.

Weaver is helping Nelligan navigate through the new healthcare landscape. Their goals are to keep their insurance as similar as possible to what they already have, keep it affordable, and allow access to the same doctors and hospitals.

But it'll be a challenge, and take a lot of work.

"We're in the insulation business. We're not in the insurance business and don't want to be," Nelligan said.

Nelligan employs 25 people. What they, and many small businesses would like more than anything, it seems, is more time. They'd like the same sort of extension given to larger businesses on when they must change their insurance plans.

The new federal report comes from the Office of the Actuary at the Centers for Medicare and Medicaid Services and estimates about a third of small businesses, roughly six million people, will actually see a decrease in their health care costs.

Weaver says he's found that to be the case for small businesses with an older team of employees.

To read the entire report, CLICK HERE.