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Despite Incentives, Georgia Small Business Owners Skeptical Of Health Reform Law

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The U.S. Supreme Court will soon hand down a landmark decision on President’s Obama’s health reform law.

Georgia’s small business owners anxiously await the decision.

Under the Affordable Care Act, businesses with fewer than 50 workers aren’t required to provide health insurance to employees. But it does offer tax credits to encourage employers to do so.

Nonetheless, many of Georgia’s small business owners have a negative view of the law.

Pat Kaemmerling owns a small computer store in Norcross. With just seven employees, she’s proud that she’s always been able to provide health insurance to her employees. But she says costs continue to rise and it’s been too costly and confusing to apply for the tax credits.

“We don’t have an accounting department, and a tax attorney, and all of that sort of stuff that we can call in, and even if we knew somebody, we couldn’t afford to do that.”

Kaemmerling hopes the Supreme Court overturns the law and lawmakers come up with legislation that simplifies the system and better addresses rising premiums.

In a speech earlier this month, Georgia Attorney General Sam Olens, who is one of 26 attorneys general suing to overturn the law, says he’s heard from concerned business owners across the state.

Under the law, employers with more than 50 workers will be required to provide health insurance. If they don’t, they get penalized. Olens says if the law is upheld, businesses will drop workers en masse.

Here’s Olens relaying a recent conversation he had with a Georgia manufacturer, who remained nameless.

“When you’re given the option of paying a two thousand dollar penalty or five to ten thousand dollars per employee, you don’t have a choice. So, it’s not that he would not want to retain insurance for his employees, it’s that he would not be competitive.”

But health policy expert Tim Sweeney of the nonpartisan Georgia Budget and Policy Institute argues small employers dropping coverage isn’t necessarily a bad thing.

In 2014, the law sets up an insurance exchange so individuals can group together, leverage their numbers, and get better rates from private insurers. He says as long as individuals have the exchange, employers shouldn’t worry.

“If they decide to drop, then it might be a good thing, because they’re able to focus, A, on their business more, and, B, now their employees have potentially a better option in terms of the exchange.”

Health advocate Cindy Zeldin of Georgians for a Health Future says one of the main positives of the law is that the federal tax credits are attached to the individual, not the employer.

“Small and medium-sized employers that have largely low-wage workers – they’re not offering right now anyway – so those consumers will be better off anyway whether their employer either starts offering or sends them to the exchange and pays the fine.”
 

But for small employers that do offer coverage, affordability is still a big concern. Kyle Jackson of the National Federation of independent Business, which is suing to overturn the law, says exchanges don’t do anything to fundamentally alter the rise in medical costs.

“You can argue that there will be some very small cost-savings to the employer not spending a lot time every year renewing their health insurance but in terms of actually helping bend the cost-curve on premiums, and the cost of health insurance, I don’t think that’s what the exchanges really do.”

The Supreme Court is expected to issue a ruling this week.