Small Businesses Look Ahead at the Affordable Care Act

At a recent FCEDC CEO Roundtable, members received timely updates regarding implementation of the Affordable Care Act (ACA) and its effect to small businesses. Scott Smeaton and Joe Zack from Hierl Insurance covered the enacted regulations and program delays; however, one question remained – How much will ACA cost small businesses? 

Wall Street Journal (WSJ) reporter Anna Wilde Mathews gave us a peek at upcoming premium increases in her recent article, Insurance Prices Could Jump (link below), by monitoring annual financial reporting of healthcare insurance carriers.  FCEDC asked Anna what she saw for small businesses, especially those in the Midwest. She replied that in states where small-group rates can vary according to the claims history and nature of the workforce, companies having lower rates today because of a younger, healthier workforce may see increases. However, those that were in the opposite situation could potentially see rates go down. She added that the WSJ is always eager to talk to companies affected by the ACA law.

FCEDC also reviewed insurance carriers’ annual reports and stockbroker updates for a look forward into the employer coverage landscape.  We found healthcare companies with portfolios of small to mid-size employer plans will raise costs not only as a result of the ACA but to help them offset:

  • Mid to high single digit increases from healthcare providers,
  • Growing gap in Medicare revenues,
  • 2-3% revenue drain from taxes and fees for the ACA.

WellPoint’s CEO commented during a recent analyst call that individuals in Small Group Employer Plans (2 to 50 full time employees) would be most likely incented early on to move from buying coverage directly for their employees to shifting employees to a public exchange.  WellPoint thinks a material migration will not occur in 2014.  One reason for the slow migration is the delay of the Small Business Health Options Program (SHOP) which provides exchanges of pooled coverage with multiple plans. After 2014, the 5-year model, according to WellPoint, estimates a 30% migration from Small Group Employer Plans to public exchanges.

WellPoint’s Management Presents at Barclays Global Healthcare Conference (Transcript Excerpts from

WSJ Article –


Of interest –

WellPoint, Inc. is the largest managed health care, for-profit company, in the Blue Cross and Blue Shield Association. The company has a significant market share small business employer plans.

Fond du Lac County Economic Development Corp.’s (FCEDC) CEO Roundtable is a dynamic group of owners, chief executives and senior level officers from local private-sector companies.  Business leaders interested in participating in topics that impact our region and our workplaces are urged to contact Bill Steimel, Director of Business Development, FCEDC  at 920.929.7581 or