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w w w . i n s i g h t o n b u s i n e s s . c o m A p r i l 2 0 1 6 • I NSIGH T | 29 B y S e a n P. J o h n s o n I N S I G H T O N H E A L T H I N S U R A N C E J oe Gonyo will unreservedly argue health insurance is a critical benefit for employees. He truly believes in it. But aer years of double-digit increases and the unanticipated effects of the Affordable Care Act, he's just not sure how much longer his company can afford to provide it. "Since the company was founded, this has been an important part of what we do for our people," says Gonyo, vice president of operations for Berlin-based W.C. Russell Moccasin Co. "If I don't offer it, I'm not sure I can keep or attract the talent we need." at may be one of the unanticipated dilemmas created when ACA was passed. While small businesses — those with fewer than 50 employees — are specifically exempt from the requirements of providing health insurance to employees under the ACA, many provide it as a way to retain and attract talent. However, some of the changes brought on by the health insurance law have made it harder for those small companies to keep the benefit. Despite the challenges, coverage offered to employees has increased among small businesses nationally, ticking up in 2015 to 54 percent of firms with 50 or fewer employees from 52 percent the year before, according to a recent Kaiser Family Foundation study. Roughly 96 percent of the nation's employers are small businesses with fewer than 50 employees. For starters, small businesses were exempted from the requirement to offer insurance because ACA expanded access and provided subsidies for workers to purchase individual policies. However, with fewer employees needing insurance, small companies lose some of their purchasing power to drive down rates. Additionally, some of the mandated coverages and changes in ratings continue to drive up the cost. Combine that fallout with a tight labor market and a true dilemma for small business owners emerges: a benefit they need to be competitive is rocketing out of their reach. "It has become an expensive benefit that I no longer feel I have control over," says Gonyo, who has 32 employees eligible, 15 carrying the insurance. For Chris Hanson, stories like Gonyo's have become all too common the past few years as small companies wrestle with the new Health insurance hazards Small businesses wrestle with costs, benefits of providing health insurance insurance realities. With the market making individual policies a better option for employees, small businesses will likely struggle with providing the benefit, particularly those looking to add it as a new option to their benefit package, says Hanson, president of Hanson Benefits, a health insurance consulting firm in Appleton. Small companies that already offer health insurance may gain a bit more breathing room as many non-ACA compliant plans can continue to be renewed until 2018, she says. "We've got one more renewal cycle to go," Hanson says. "What we are seeing on the market right now is that it costs less for an individual to go to the marketplace than it costs for a small business to start up an insurance plan. But that could change as we continue to see rate increases in the individual market." Even with the extended window, small companies are battling rapidly- escalating costs and limited options as they look into group policy renewals. For example, while preparing for its latest renewal, W.C. Russell Moccasin was quoted a 22 percent increase in rates for its group policy. A second company quoted an 11 percent increase, but had inadvertently used Winnebago County as the location instead of Green Lake County. With the marketplace diminishing, Gonyo says the company is investigating a self-funded plan going forward, which may better control costs, but it also carries [continued] »