Illinois businesses work to sort out the Affordable Care Act

May 16, 2013

 

Illinois businesses are preparing for the Affordable Care Act to go into full effect in 2014, and a leader from the Illinois Chamber of Commerce says some are considering limiting work hours to avoid future healthcare costs. But costs and logistics vary widely across different types of firms.

“It’s one giant puzzle within a puzzle within a puzzle,” said Laura Minzer, the Executive Director of the Health Care Council for the for the Illinois Chamber of Commerce.

She says employers, small and large, are scrambling to figure out which provisions of the federal law will apply to them and their employees. Businesses with under 25 employees may become eligible for tax credits for providing health care, while businesses with over 50 workers could face fines if they don’t provide affordable insurance for all employees working 30 hours or more.

The number of workers receiving employer-sponsored health care has declined steadily in recent years. Now, Minzer says limiting employee hours to under 30 is on the table for some bigger businesses worried about new health care costs.

“The cost of their benefits is not going down and it will not go down with this law,” said Minzer. Indeed, insurance premiums have been steadily rising, and experts expect to see a continued rise nationwide. But cuts to hours may be nothing new: the proportion of workers in part-time jobs has been on the rise since 2007.

One in five adults in Illinois is currently uninsured, and if they can’t get employer insurance, some will become eligible for government subsidies through the “marketplace” (formerly known as the exchange), which is a state and/or federally-run service intended to centralize and streamline shopping for private health insurance. Sliding scale subsidies in the form of tax credits will be available to those making up to four times the federal poverty level. Currently, Illinois has agreed to an insurance marketplace run jointly by Illinois and the federal government, but Minzer says the Chamber of Commerce supports opening a state-run marketplace by 2015.

“Even with all the concerns that we have about affordability, we see value in...the fact that you have a one-stop-shop for health insurance,” said Minzer. “The state is in a better position to administer that.”

States also have the option to expand Medicaid eligibility to adults making up to 138 percent of the federal poverty level, an option that’s already being piloted in Cook County. However, because of a controversial Supreme Court decision, states can opt out of the Medicaid expansion, and Illinois has yet to pass a bill that would expand Medicaid statewide in 2014.

Perhaps surprisingly, the Illinois Chamber of Commerce also supports the Medicaid expansion.

That’s because there’s a benefit for business: employees who receive Medicaid would do so without triggering penalties for their big employers (as opposed to seeking out insurance through the marketplace, which would trigger penalties). Recent reports have found that larger businesses have a financial incentive to support Medicaid expansion and avoid fees for not providing health insurance to low-income employees.

Bills to expand Medicaid and to establish a state-run insurance marketplace are creeping through the Illinois General Assembly, and the federal/state insurance marketplace is slated to open October 1, 2014.

Lewis Wallace is a Pritzker Journalism Fellow at WBEZ. Follow him @lewispants.