Tribune Review: Small Businesses Fret Over Health Care Law's Fallout

The year-old health care overhaul could be disastrous for small businesses in 2014, forcing some to close their doors and others to lay off workers to avoid complying with costly regulations, business representatives said at a health care event on Wednesday.

"It's depressing. Who knows what the (insurance) rates will be? We are victims before the reform and after," said Christine Simcic, secretary-treasurer of Wojanis Hydraulic Supply Co. Inc., a company in Robinson that makes hydraulic parts and equipment for the mining and natural gas industries.

Although some provisions of the health care overhaul passed in March 2010 have taken effect, government guidelines concerning an essential benefits package and how much can be charged in co-payments will not take effect until 2014. Workers without employer-sponsored coverage will have to get insurance through a government-operated insurance exchange.

Wojanis, which has 18 employees, has been hit with 10 percent annual increases in its health insurance premiums, Simcic said. Employee insurance premiums cost about $50,000 a year, and that's with some workers opting out of coverage, she noted.

Simcic and a dozen other business representatives at the event, sponsored by SMC Business Councils in Churchill, told U.S. Rep. Tim Murphy, R-Upper St. Clair, that the health care overhaul must be changed, if not derailed. Murphy, a psychologist before entering Congress, is co-chairman of the House 21st Century Healthcare Caucus and Mental Health Caucus and a member of the health subcommittee.

Daniel Galbraith, owner of Solutionist, a Hempfield-based business consulting firm, said he is aware of one Westmoreland County company with more than 70 full-time and part-time employees that may be forced to close because it cannot afford to comply with new health insurance regulations.

"A lot of people fall into that category," said Galbraith, who declined to identify the company.

Companies with more than 50 employees that offer health insurance, but have workers unable to afford the premiums, may be penalized up to $3,000 for each employee whose premium is subsidized through a government-sponsored insurance exchange.

To avoid the government-mandated coverage, some businesses might split up, creating multiple companies that employ less than 50 workers, or outsource work and cut workers, said David Ross, president of Anago of Western Pa., a Bridgeville-based cleaning service company with independent franchises in the region.

Ross, who has 10 employees, said the changes will do nothing for small businesses run by a single owner-operator.

"We don't know what the benefit levels will be" offered by the insurance exchanges, said Mark Shelleby, treasurer of Vista Metals Inc., a 120-employee company that makes tungsten carbide parts.

Some companies may opt to pay the government penalty rather than pay $7,000 to $10,000 to insure their workers, Shelleby said.

The government is providing a health care tax credit to reduce an employer's costs, but it is limited to companies whose average wage is less than $25,000. That will result in few businesses taking advantage of it, Shelleby said.

By Joe Napsha
Joe Napsha can be reached at jnapsha@tribweb.com or 724-836-5252.