So when I received an invitation to testify about my experiences with health care before members of the House of Representatives today, I couldn’t say no.
We offer health care to all employees who work over 28 hours a week – and we pay 75 percent of the cost. This is an important part of our business values. It’s also been a huge challenge.
Between 2004 and 2010, we were faced with rate increases routinely exceeding 20 percent – as high as 40 percent in 2009. In 2011, our health care costs were more than $67,000.
We’ve got to get these costs under control. How? Let’s start with upholding the Affordable Care Act.
Before I started my business, I worked in corporate America for 13 years. One of the biggest surprises I faced when I decided to start my own business was how little we got in health care benefits for almost twice the dollars. Even now, businesses our size are still too small to have any bargaining power.
The ACA’s state insurance exchanges are finally going to change that. A state exchange will give me the opportunity to band together with thousands of other small businesses across Washington State to get better health care at better rates.
Joining a group with hundreds of thousands of participants will be a huge leap in risk-pooling, economies of scale, and negotiating clout. We’ll finally be able to tap into the kind of bargaining power big companies like Starbucks and Microsoft have.
On top of the state exchanges, other parts of the ACA are already helping small businesses. The 80/20 “value for premiums” rule is one example. Under this rule, rebates for this year alone are estimated at $1.3 billion, with checks due in the mail this summer. And then there are the law’s rate review provisions, which are helping bring much-needed transparency to proposed rate increases.
It’s still just the beginning, but these provisions are making a difference. My rate increase this year was a lot lower than I’d come to expect over the years – and I’ve heard about other small business owners who’ve seen their rates held flat or even cut.
Opponents of the ACA like to complain about the employer responsibility piece. They claim it’s a barrier to job creation. As a small business job creator, I couldn’t disagree more.
As a business owner who offers health care, the real barrier for me is that when other businesses bigger than mine don’t offer health insurance, I’m forced to subsidize their costs. This health care cost-shifting costs my business hundreds of dollars per employee per year. This is not fair competition.
The only way to fix this free rider problem is through a system that combines personal responsibility and shared responsibility, a system where nobody takes a free ride. That’s what the ACA does – and that’s going to cut my costs, too.
Is there more work to be done on health care? Of course.
For example: why not expand the law’s small business tax credit? Recent reports suggest not enough businesses are benefiting. But instead of criticizing the credit, if members of Congress want to be problem-solvers they should ask, “How can we make this credit work for more businesses?”
My business isn’t eligible because we have more than 25 full-time equivalents (FTEs). Why not expand the limit to 50 or even 100 FTEs? Do that and my business would see a credit worth thousands of dollars.
The Affordable Care Act is taking critical steps to lower costs and bring affordable, good quality health coverage within reach for small businesses.
We need to keep building on the ACA, not repeal it. I may be a risk taker, but that’s a risk I can’t afford to take. I can’t afford to go back to the broken health insurance marketplace that gave us rate hikes of 20, 30, and 40 percent a year.
Moving forward with the Affordable Care Act, we can finally lower health care costs and level the playing field for small businesses. That will allow business owners like me to focus on what we do best – things like creating jobs and serving up great value to customers, one cupcake at a time.
Hall owns Cupcake Royale, a growing cupcake bakery and café business in Seattle, Washington with over 70 employees. She is a steering committee member of the Main Street Alliance of Washington, a network of over 2,000 small businesses across Washington State. She testified before the House Education &Workforce Committee’s Subcommittee on Health, Employment, Labor and Pensions on Thursday.