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Business leaders react to healthcare law

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Ashley Eller, 23, of Kennesaw, left, talks with Dr. Alyssa Bowers-Zamani during her visit to Kennesaw OB/GYN, which is part of the WellStar Medical Group. WellStar pays roughly 85 percent of its 12,000 employees’ insurance.
Photo by Jon-Michael Sullivan

Presidents and CEOs from both large and small businesses in Cobb County have mixed feelings on the U.S. Supreme Court’s ruling of the Affordable Care Act of 2010 from last week.

The federal court last Thursday decided 5-4 to uphold the provision of the health care law that requires most people to buy health insurance or pay a tax. The law also requires employers who have 50 or more employees to provide coverage or be fined $2,000 per person after the first 30 employees. The fines are set to take effect Jan. 1, 2014.

Reynold Jennings, the CEO of WellStar, said he’s anxious about the law because the “devil is in the details.”

“So many things are covered in a 2,000-page law,” he said.

WellStar employs around 12,000 employees and some of those may have spouses who get insurance through the hospital organization. It pays roughly 85 percent of its employees’ insurance costs.

“We are self-insured, like most large companies are,” he said. “The third party collects the premiums. There is a range of deductibles and each person makes those selections. Like most companies, our employees have been choosing higher-deduction plans to keep their portions lower. Employees are mostly in the $1,000 to $2,000 annual family deductible.”

Infomart in Marietta doesn’t serve nearly as many employees as WellStar but the employer of around 100 does have concerns about the law.

“It is going to require more paperwork, resources and money while changing the employer’s focus from job and business growth to regulation and compliance,” said Infomart President Tammy Cohen.

The business, which opened in 1989 and is located off Terrell Mill Road, pays a portion of their employees’ insurance that has increased over the last five years.

“InfoMart strives to provide our employees with health insurance coverage (employer/employee shared cost). Despite the steady rise in healthcare costs, the company pays for at least 75% of employee health insurance premiums,” said Heather Wright, the director of corporate affairs who’s been with the company for 10 years.

Large businesses aren’t the only ones who are worried about how the law may impact their costs. Smaller businesses that employ fewer than 50 employees and choose to offer insurance may pay higher costs or could be pushed into no longer offering the incentives.

The higher costs are what worry Andy Crowe who owns and operates Velociteach in Kennesaw and said he thinks small businesses like his will “take it on the chin” with the new coverage plan.

“We provide Etna Insurance for our employees. That plan is going up 3 percent, which doesn’t sound like a lot but it’s a level that’s very difficult for us to sustain and we’re struggling already,” he said, adding that the 3 percent increase is a result of a tax increase by the federal government.

Crowe only employs about 26 full-time and part-time employees and contractors and isn’t required to offer his employees insurance coverage but he chooses to do so.

“We’ve gone out of our way to provide insurance for our employees since very, very early in the company so I didn’t really need more oversight or overhead in that regard,” he said referring to the law’s mandates. “We weren’t excited about (the law) from that standpoint. We try to take care of the people who work for us … try to provide good benefits.”

His employees pay a “very small” amount of their premiums and Crowe said the company covers about 90-plus percent of the other costs.

“I think (employees are) appreciative but also they don’t know (how much Velociteach pays) … I don’t come back to them each year and tell them how much we’re paying,” he said. “I’m getting to where I can’t absorb that year after year. If this fixes that problem, that’d be wonderful, but I can’t see how it is fixing the problem.”

On the flip side, Crowe said he does agree that it will be helpful to families who want to continue insuring their children until they are 26.

“The law has enacted some need changes there but I don’t’ think it’s 100 percent bad, but the net outcome will push costs up,” he said.

The cost of insurance has continually increased for Crowe as well.

“It’s been awful. We’ve had some health issues within our company that have exaggerated the cost so it’s gotten to be a real concern,” he said.

Some solutions that Crowe said he’s been talking to other business owners about is the concept of a Professional Employer Organization (PEO).

“It’s something that’s pretty popular now a days,” he said. “You pool your employees together into what becomes a large company. People are doing that because of the insurance and that’s something we’ve considered.”

Crowe said it wouldn’t affect his employees but it’s an option he’s looking into as a way to reduce costs for his company.

Kevin Foley, who has a background in business and is a specialist in electronic public relations solutions, said he believes that the law is “beneficial” for businesses all the way around.

“To attract the right kind of employees, you have to offer competitive benefits. Healthier employees are better employees,” he said. “Georgians in general don’t want to pay taxes but ultimately you’re going to have to pay more taxes to cover the cost of health care. If we want to have a society where people are healthy, you have to do that.”

Dr. Roger Tutterow, a professor of economics at Mercer University and Cobb native, said he’s waiting to see if health care costs increase.

“Most studies would suggest that a lot of medical expenses are related to chronic conditions, lifestyle choices,” he said. “It goes hand in hand in improving the quality of medical care against the expense of providing it.”

As far as what businesses may expect, he thinks they are just searching for clarity in the law and he isn’t sure if the ruling last Thursday did that.

“I think most business leaders would tell you they would have preferred to have seen the health care law struck down,” he said. “There’s a sense that it could raise costs for businesses for employees.”

(Reprinted from the MDJ, July 5, 2012. Written by Lindsay Field and Kim Isaza. Read more: The Marietta Daily Journal – ‘Devil’s in the details’)

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