NEW YORK (AP) — Many small businesses hope to temporarily sidestep Patient Protection and Affordable Care Act (PPACA) by renewing their coverage early.
One of those businesses is Huber Capital Management. The asset management firm is renewing its health insurance policy this year, instead of next year. The early renewal will help the company avoid buying insurance that conforms to PPACA requirements, and also help it avoid any surge in rates resulting from PPACA.
"We can just push this whole thing off and defer it for essentially one year," says Gary Thomas, chief operating officer of El Segundo, Calif.-based Huber Capital, which has nine employees covered by insurance.
The Obama administration says it won't force employers with at least 50 workers to comply with the PPACA coverage reporting rules or the PPACA "play or pay" coverage mandate until 2015, but the law will still affect businesses.
Any company that offers health insurance, including very small businesses, will still have to contend with many other PPACA provisions starting Jan. 1.
Many insurance companies are raising their premiums sharply because they don't know yet how many people will be covered by insurance. No one knows how quick young, healthy uninsured people will be to sign up. Supporters of PPACA are hoping a larger pool of insured people will bring down the average cost of claims per enrollee. If people forgo coverage, that may not happen.
Thomas got the idea to renew early from Huber Capital's health insurance broker, who said the firm would likely have an 8 percent increase in premiums if it did renew in 2013, compared to an estimated 30 percent under a policy that complies with PPACA. The idea is also appealing to many companies because they can put off dealing with the law's complex requirements. For example, companies with 50 or more workers must do calculations to determine whether they're providing adequate insurance coverage. If they have employees who work less than 40 hours, owners need to determine whether those workers must be covered. By renewing in 2013, owners will get more time to educate themselves about the law.
"Some of the things that might be guesswork or estimates will be more of a known quantity than they are today," Thomas says.
Quantum Networks, an online seller of high-tech items, is also renewing on Dec. 1. Its broker says its premiums may be unchanged from this year under a renewed policy.
"We want to drag this on as long as possible," says Bita Goldman, vice president for operations. "For a small company like ours, every little bit helps."
