Small businesses still largely confused about Obamacare

With less than a year to go before the full rollout of Obamacare, many business owners are still scratching their heads over what it will mean for them.

In fact, most still wrongly believe they’ll have to offer health insurance to their employees, according to a recent eHealth survey.

Another commonly misunderstood part of the health care law is the role of the tax code. The Center’s John Gonzales has more details about how paying your taxes and Obamacare works here. It’s the bedrock of enforcing and offsetting costs for people to buy insurance.

At an event about taxes and Obamacare, UCLA health care economist Dylan Roby gave a somewhat grim picture. He says widespread ignorance and varying degrees of hostility towards the health care law persist among business owners.

“Many of these employers, especially on the smaller level, are not that great about maintaining a relationship with the government,” Roby says.

Take, for example, the small business tax credits that are currently available. The U.S. Government Accountability Office last year estimated that less than 5 percent of eligible businesses have claimed the credit. This isn’t a big surprise to Larry Levitt of the Kaiser Family Foundation.

“It’s about as exciting as picking health insurance and doing your taxes and that’s what we’re combining here,” Levitt says.

Another break for businesses trying to purchase health insurance for their workers could come from the new “marketplace” called Covered California.

This state-run exchange is supposed to even the playing field for small businesses that can pay almost 20 percent more than larger ones for health insurance. Currently a little under half of California’s small businesses offer health insurance to their employees.

On the flip side, there are also penalties for large businesses that don’t offer their employees coverage come next year. But this will affect less than 5 percent of businesses. That’s because in California, and nationally, most businesses are considered small, meaning they have fewer than 50 employees.

Allan Zaremberg, head of the California Chamber of Commerce, says it’s a daunting task for businesses to keep the carrot and stick aspects of Obamacare straight.

“There is a heck of a lot of confusion about tax credits and costs and do I put him in the exchange or take the penalties,” Zaremberg says.

Allan says he’s not convinced the stick approach will work with businesses. He says they’ll be weighing if taking a couple thousand-dollar penalty per employee for not offering coverage would actually be cheaper.

“I’m not always sure that you can scare them with a monetary penalty. And certainly for a small employer there is none,” Zaremberg says.

Now the push is on to educate businesses about the potential benefits of Obamacare. USA Today and Kaiser Health News report that California has budgeted about $250 million to help consumers, including small businesses. But few experts are saying it’ll be easy. 



Kelley Weiss

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Kelley Weiss

Broadcast reporter Kelley Weiss is based in our Sacramento office where she’s helping lead the center’s expansion into public broadcasting. Her stories have appeared on NPR,Marketplace, The World, KQED Public Radio, Southern California Public Radio and World Vision Report. She’s produced series about the illegal sale of prescription drugs at swap meets and preventable patient deaths and money mismanagement in Missouri’s mental health system. She won a 2009 national Edward R. Murrow award for investigative reporting and has received several honors in the Association of Health Care Journalists awards competition. She was named a Livingston Finalist in 2011 for a multi-platform project about how tribal sovereignty makes it nearly impossible for mothers to collect child support. Weiss previously worked as a health care reporter at Capital Public Radio in Sacramento and KCUR in Kansas City. Her work has also appeared in Reuters, the San Francisco Chronicle and theCenter for Investigative Reporting. She’s completed a health reporting fellowship from the Association of Health Care Journalists and has a journalism degree from the University of Kansas.

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