Connecticut businesses concerned about ruling’s impact

Groups representing Connecticut businesses Thursday were wary of the Supreme Court’s landmark health care decision, concerned it will drive up costs and even prompt some small businesses to stop offering health insurance altogether.

“This is basically a devastating loss for small businesses, which are at the mercy of the law, the law that has already driven up the cost of insurance premiums,” said Andrew E. Markowski, state director of the Connecticut chapter of the National Federation of Independent Businesses.

While it is too early to predict the full impact of the ruling, he said that, anecdotally, he has heard that many small businesses plan to stop offering health insurance coverage.

“There is no incentive for them to do so. It is cheaper to pay the penalty than it is pay insurance,” said Markowski, whose group represents 3,000 Connecticut businesses. The NFIB is the group that challenged the Affordable Health Care Act in the Supreme Court lawsuit.

Mike Paine, who owns Paine’s Recycling and Rubbish Removal in East Granby, said he wants to continue offering health insurance to his 75 employees but worries about increased costs.

“For now, I’m going to provide health insurance, but I’m going to weigh my options,” Paine said. “It may be that I can’t afford to provide health insurance. I’m not liking that that choice is being forced on me.

“I don’t like the government telling me how to run my business,” he said.

Markowski said the ruling will result in new taxes and fees that will collectively amount to an $87 billion tax on insurance companies. He predicted that insurance companies will pass that tax on to small businesses that buy health insurance. As a result, he predicted this would cost companies at least $500 per employee per year.

He also said very few businesses would actually be eligible for any tax credits for offering health insurance under the Connecticut Health Insurance Exchange. He said the National Federation of Independent Businesses has a calculator http://www.nfib.com/advocacy/healthcare/credit-calculator on its website that allows businesses to determine if they would be eligible for a tax credit.

Officials from the Connecticut Business and Industry Association were more measured in their reaction.

“I don’t know if that’s a good thing or a bad thing,” said Joseph F. Brennan, senior vice president of the CBIA, said of the court’s ruling.

Brennan said the reason for his wariness rests largely with flaws in the Affordable Care Act that have been there since its enactment.

“It doesn’t really address cost sufficiently. It doesn’t really address quality sufficiently. It’s really just about reducing the number of uninsured,” he said.

But with health care advocates projecting that Connecticut’s Medicaid rolls could grow by as many as 130,000 people by 2016, the potential risk of a system that lacks adequate cost controls looms large, he said.

The Patient Protection and Affordable Care Act also creates tax incentives for companies that purchase insurance from insurers operating within state health exchanges. So what happens to the insurance market — particularly those carriers not affiliated with the exchanges, if their business dwindles and health care costs rise?

“Obviously we’re watching closely the development of the exchange,” Brennan said. “There’s still a lot of work to be done, and we want to make sure we can have a robust, private (insurance) market.”