Small businesses get some relief from health care law

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Is it possible that policy is already being influenced by the large group (33) of small business owners who will take seats in Congress next January? After all, they are the largest and most outspoken contingent of small business persons ever elected in a midterm. In contrast, two years ago only 11 small business owners won election.

Advance influence or not, the Department of Health and Human Services announced this week it’s loosening up on a new health care rule to allow employers to switch insurance carriers without having to meet certain new coverage requirements. The unexpected change will now allow employers to keep their grandfathered status even if they switch plans, as long as they don't significantly cut benefits or increase costs for the employees.

More specifically, the new health care law requires most insurance plans to provide free preventive care and gives enrollees more power to appeal coverage denials. But that pushes small businesses into a real dilemma: pay much higher premiums to keep their current plan or switch to a possible lower-cost plan.

However, in the latter case, the new plan would have to include all the required new benefits and that would cancel out the reason for changing - lower cost. Moreover, by not allowing employers to change plans and maintain their grandfather status, the administration was really killing competition and handing the insurance industry a rate-increase hammer!

The change does not apply to large employers. And, small businesses should still proceed cautiously. The new guidelines specify that an employer can lose the grandfather status if employee co-payments are increased by more than $5 or the deductibles are increased more than 15 percent. Also, if the percentage of premium paid by the employee is increased more than 5 percent, the employer would lose the grandfather status. Obviously, time with your insurance provider will be well spent.

And, in case you’re wondering, the 33 small business owners elected to Congress are all Republicans. One will be a Senator from Wisconsin. Thirty-two go into the House. Thirty-two are men, one woman. Reportedly, 14 of them have never held an elective office. Finally, three House races with small business candidates are still undecided.

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