Entrepreneurs

Small-business owners are full of questions and regrets about the end of Obamacare

With the repeal of the Affordable Care Act likely but its replacement uncertain, small-business owners are weighing their options for the future.

More details may come Tuesday evening when President Trump makes his first address to both houses of Congress as commander-in-chief.

Trump took executive action on January 20 to "ease the burden" of the Affordable Care Act and formally announced the administration's policy to "seek the prompt repeal" of the law. However, doing so with any speed has proven difficult. The president told a meeting of the nation's governors on Monday, "Nobody knew that healthcare could be so complicated."

Dirk Bak is simply hoping for cost controls. His business, SDQ Janitorial in Minnetonka, Minn., has been family-owned for 34 years and had been offering its nearly 200 full-time workers coverage even before the ACA became law.

"We saw, two years ago, a dramatic price increase for our premiums," Bak says, adding that the hike was over 30 percent in one year.

Today, 91 percent of full-timers at the facility services company have coverage. "I would like to see the mandates dropped," he says. "Before, it was something that as a company, you had a choice [to offer or not]."

Lisa Lake | Moveon.org | Getty Images

Trump's executive order weakens the individual mandate, which requires everyone to carry health insurance or face penalties. Many experts expect his administration to scrap the employer mandate as well.

In that case, Bak would no longer be responsible for offering workers coverage. But since he realizes workers' benefits are a significant draw, he won't get rid of them, either.

"We plan to keep [healthcare] in place, so long as we can remain competitive," Bak says.

Mike Roach of Paloma Clothing in Portland, began offering benefits to workers in 2007. Once the Affordable Care Act kicked in, he benefitted from a tax credit to offset the cost of offering coverage at his small business.
Photo: Thomas Grissom
Mike Roach of Paloma Clothing in Portland, began offering benefits to workers in 2007. Once the Affordable Care Act kicked in, he benefitted from a tax credit to offset the cost of offering coverage at his small business.

Not all small businesses find fault with the law. While Mike Roach's business, Paloma Clothing in Portland, Oregon, is too small to have to comply with the employer mandate, he and his wife Kim Osgood began offering insurance in 2007 and saw that, in response, employee turnover slowed.

The couple also benefited from a tax credit under the Affordable Care Act for smaller businesses with under 50 workers that opt to offer health-insurance. While Roach's tax credit expired in 2015, he says it greatly helped to offset the cost of offering benefits to workers on his group policy.

"We realized our employees were staying with us longer and longer, and in fact we have one of the best longevity factors we've ever had in our business right now," Roach says, adding that, though his tax credit is expiring, his business is continuing to offer benefits to workers because he's seen such good results.

"I greatly benefited from the ACA during the years it's been in place, and I wish more of us had spoken up loudly so that the public, Congress and the President had a better understanding of that." -Mike Roach, small business owner

"I greatly benefited from the ACA during the years it's been in place, and I wish more of us had spoken up loudly so that the public, Congress and the President had a better understanding of that," he says.

And unlike the increases Bak's business experienced in premium costs, Roach said the ACA helped to slow the rising of insurance premiums for his smaller group of covered employees. Destabilizing the insurance market with new reforms, he fears, may lead to higher costs.

"The ACA was the first time there was any government legislation — federal or local — that was actually helpful to us with regard to paying for our employee's health insurance," he says.