Minding Ag's Business

Online health care exchanges are supposed to open for business tomorrow, barring a last-minute intervention from Congress. Your new best friend in navigating these changes for yourself, your family and your employees will be a qualified CPA firm. Large accounting firms have devoted armies of experts to analyze the rules and get up to speed on what business owners will need to do for compliance. Some have also developed their own calculator programs to assess whether you are better off continuing coverage with a private small group plan, buying similar coverage in the new statewide SHOP markets for small business or discontinuing coverage and buying coverage as individuals in the state marketplace.

I wish I could say this will make health care coverage less complicated, but any change this massive will involve some bumps at launch. Since mandates for personal coverage don’t start until 2014, you'll have plenty of time to weigh your options and still let online markets for individuals and small business SHOP plans work out the kinks.

I know from my last post that many of you are skeptical. Before you get bogged down in details, remember small business owners have more to gain than lose in this health care, says Rhett Buttle, a vice president for Small Business Majority, an advocacy group representing 300,000 small businesses. He and DTN Tax Columnist Andy Biebl will address the topic at the DTN-Progressive Farmer Ag Summit in Chicago Dec. 9-11.

Employers with one to nine employees pay 18% more for health insurance than their Big Business counterparts and one out of four sole proprietors have no insurance coverage for themselves largely due to costs or pre-existing medical conditions . Some have elected high deductible plans that essentially only cover catastrophic and emergency health care, not routine or maintenance.

"When one Costco employee gets sick, it doesn't ruin your health care plan. When one person in a group of 10 gets sick, you don't only worry about them, you worry if your insurer will jack up your premium rates," Buttle says.

Buttle's small business organization believes individual marketplaces and the state's small business group markets (SHOPS) will offer better and less expensive coverage than many small plans do now. In fact, overall rates could be about 8% less than what small business owners pay on average now, it says. That doesn't count the 50% tax credit available to small business owners who buy employee coverage on the exchange next year.

Individuals may find similar deals. Your rates and insurance offerings will vary by where you live, your age and other factors, but the Kaiser Family Foundation was pleasantly surprised by how competitively priced unsubsidized rates were in the 36 individual exchanges run by the federal government and another 14 state-run markets. Most rates ran under $400/mo. for those under 55. For a sample of individual "silver" plans with $1,500 deductibles and a maximum of $6,350 deductibles, go to http://www.kaiserhealthnews.org/….

Keep in mind, these rates don't include tax credits which could shave an average of $2,750 off premiums for moderate- to low-income individuals.

Jarek Steele, who owns a chain of small book stores in the St. Louis area, crystallizes the issue in terms farmers can appreciate. He pays 100% of the insurance cost for his 12 full-time employees as a way to attract and keep talented workers, but he's had to raise deductibles to $5,000 apiece to keep premiums affordable. Even so, that's $270,550 over the past five years--or the entire profit from selling 40,050 paperbacks--just to pay the fringe benefit. He expects to qualify for premiums on the exchange closer to $220 per month--saving $195 per month--once they open for business.

"I'm excited we can offer insurance that doesn't punish us," he says.

For a small business primer on the Affordable Care Act and more information on the SHOP marketplaces, go to Small Business Majority's http://healthcoverageguide.org/…

Let me know what you find out navigating the insurance exchanges.

Follow Marcia Taylor on Twitter@MarciaZTaylor.

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