On June 21, the Department of Health and Human Services released figures showing health insurance customers are due rebates totaling $1.1 billion from insurance companies that spent too little of their premium dollars on health care in 2011. These rebates are thanks to the 80/20 “value for premiums” rule in the Affordable Care Act, which requires insurers to spend at least 80 cents of every premium dollar collected in the small group and individual markets on health care (as opposed to lobbying, advertising, executive compensation, and general administration).
HHS also released state by state numbers (available here) for the total amount of rebates and the number of insurance customers who will benefit. These figures include: $123.6 million for 1.3 million consumers in Florida; $86.5 million for 1 million consumers in New York; $61.8 million for 300,000 consumers in Illinois; $43.1 million for 687,000 consumers in Virginia; and $27.9 million for 141,000 consumers in Maryland.
While rebates are not due until August 1, small businesses are already benefiting from the 80/20 rule in another way: it’s been forcing insurers to hold premiums down in attempts to avoid owing rebates to customers. The Main Street Alliance released the following quotes from businesses that are already benefiting from the 80/20 rule in this way:
Louisa McQueeney, CFO of Palm Beach Groves in Lantana, Florida:
“Last November, our health insurance agent called with our renewal: after annual increases of 12 percent, 22 percent, and even 32 percent, our premiums in 2012 were going to increase by a grand total of 0.2 percent. That is, essentially flat. This flat renewal came with exactly the same plan – no dumbing down the coverage, no increase in our deductibles, everything was the same.
“I’m thanking ObamaCare’s 80/20 rule for holding my premiums in check. And now, with the new announcement of more than $123 million in rebates due to 1.3 million people in Florida, we may even get a rebate on top of that. For the first time in my twelve years running this business, the health care picture is finally looking up.”
Brian England, owner of British American Auto Care in Columbia, Maryland:
“We renew our insurance in August every year, so around June is when I usually start to get nervous. When we sat down with our agent last summer, I was bracing myself for the bad news. But when he gave us our quotes, my worry turned to disbelief. Our rates were going DOWN 6 percent! I almost fell off my chair.
“The first thing I asked was, ‘why?’ I just couldn’t make sense of it. Our agent explained the rate cut was thanks to the medical loss ratio requirement in the Affordable Care Act. The health care law is working for my business. It passes this technician’s inspection test with flying colors.”
Congressional testimony may seem a long ways away from cupcake baking, but not for Jody Hall. Hall, owner of Seattle's fast-growing Cupcake Royale and a leader with the Main Street Alliance of Washington, traveled to Washington, DC on May 31 to testify about health care reform before a House committee.
Hall told the story of her business, her commitment to offering health care to her employees, and her support for the Affordable Care Act's state insurance exchanges and other provisions of the law that are putting downward pressure on health care costs for small businesses.
Helen Dally, whose parents own an auto repair shop in Oregon, spoke at a press conference on March 27 outside the Supreme Court, sharing how the Affordable Care Act is helping her get health coverage and helping her family’s business. Her parents’ auto shop is benefiting from lower premiums and a new tax credit thanks to the ACA, calling into question a challenge to the health law from a group that claims to be “the voice of small business.”
“The Affordable Care Act has thrown my parents’ business a lifeline,” Dally said. “Last year, instead of a double digit increase, their premiums went DOWN 3 percent. Plus, they qualified for the ACA’s small business tax credit – and got a credit of $12,900. My dad says the Affordable Care Act is ‘like a time machine’– rewinding their health insurance costs to what they paid in 2007.”
“The Supreme Court should protect these benefits and uphold the law,” Dally added. “As my parents say, we can’t afford to go back to a system that stacks the deck against small businesses. We’ve got to move forward. By upholding the law, the Court will allow small business owners to focus on what they do best – things like fixing cars and creating jobs – and it will allow their children, like me, to pursue our dreams.”
This week, the Affordable Care Act – the new health care law – goes before the U.S. Supreme Court. It’s a good time to ask: “Is the new law making a dent? Is it helping fix small businesses’ rough ride with health care?” We talked to a crew that knows a thing or two about dents and fixing rides: auto mechanics. These auto shop owners are seeing concrete benefits from the new law. They give the ACA a green light on inspection.
The fact sheet below includes stories and quotes from auto shop owners Jim Houser (Hawthorne Auto Clinic, Portland, Oregon), Brian England (British American Auto Care, Columbia, Maryland), Laura Waite (Jay's Professional Automotive, Renton, Washington), and David White (MDI Imported Car Service, Bar Harbor, Maine).
Read the fact sheet:
AUTO SHOP OWNERS DELIVER VERDICT ON HEALTH LAW: “IT PASSES INSPECTION”
On March 22, Brian England, the owner of British American Auto Care in Columbia, Maryland, shared the story of how his business is benefiting from the Affordable Care Act at a press event with congressional leaders marking the two-year anniversary of the ACA. Brian offers health coverage for his employees, and saw his premiums go down 6 percent last year thanks to the ACA's 80/20 value for premiums rule.
Here's a copy of Brian's remarks at the event, as prepared for delivery:
Remarks of Brian England, owner of British American Auto Care in Columbia, Maryland
Washington, DC - March 22, 2012
Thank you for the opportunity to be here today and to share what health care reform has meant for our business.
We are a family business, and proud of it – my daughter works at the workshop with us. In fact, Sandi is here today with our grandson Lucas, who will be two soon.
We’re committed to offering insurance coverage to our employees, but over the past ten years it has become a real struggle to keep up with the costs. We’ve become accustomed to rates going up from 10-20 percent each year – sometimes even more – and we’ve had to look at many different ways to deal with the extra expense.
We’ve got a great agent who does a lot of research and works hard to find the best options for us. But in the end, we’re the ones who have to decide what to do – and we’re the ones who foot the bill.
We renew our insurance in August every year, so around June is when I usually start to get nervous. We heard a lot of speculation about how rates were going to go up even more because of health care reform.
When we sat down with our agent, I was bracing myself for the bad news. But when he gave us our quotes, my worry turned to disbelief. Our rates were going DOWN 6 percent! I almost fell off my chair. We had no major changes in our group, the same average age as the year before, the same policy… but our premiums were going down 6 percent.
Premiums going down – this had never happened before, not a single time in all the years we’ve been offering health coverage. On top of this, my agent informed me we were going to receive preventive care in our plan with no co-pays.
The first thing I asked was, “why?” I just couldn’t make sense of it. Our agent explained the rate cut was thanks to the medical loss ratio requirement in the Affordable Care Act. It’s a piece of the law that requires health insurance companies to spend at least 80 percent of the premiums they collect on actual health care costs.
As a small business owner, I’m committed to providing good value to our customers. It seems only fair that we should be able to expect the same from our health insurance companies.
We are so glad that at last something has been done about health care. I want to thank Leader Pelosi for her commitment to health care reform. I know it hasn’t been easy. But it’s making a difference – and every day, more and more small businesses are seeing the benefits.
The health care law is working for my business. It’s working in our community back home. It’s the right thing to do for America and for future generations. It passes this technician’s inspection test with flying colors. Thank you.
Main Street Alliance affiliates are fighting to make sure new state health insurance exchanges are designed to work in the best interest of small businesses, not insurance companies. As part of these efforts, our affiliate in Idaho launched this video highlighting how insurance interests dominate the committees making decisions about health policy in a classic "fox guarding the henhouse" scenario. Click below to watch the video.
Are you a small business owner in New Hampshire? Is your business taking advantage of some of the early benefits of the new health care reform law? If the answer is yes, we want to hear from you!
Did you receive the small business health care tax credit for providing health insurance to your employees last year? Have you seen some stabilization of rates thanks to the new emphasis on reasonable rate increases and a minimum standard of value for premium dollars? Are you seeing better coverage with free preventive services?
If you've received the health care law's small business tax credit or are benefiting from the law in other ways, please contact us to share your story! MSA is currently collecting stories from New Hampshire small business owners - and especially woman small business owners - on this topic. To share your story, email firstname.lastname@example.org. Thank you.
Florida small business owners participating in a recent survey want large corporations to pay more taxes, believe the foreclosure situation is having a negative impact on their customer base, and support the creation of a new competitive marketplace for purchasing health insurance. These are among the key findings of the report Taking the Pulse of Florida Small Businesses, a report based on a face-to-face survey of small business owners released in Orlando on February 29 by the Community Business Association, Organize Now, and the Main Street Alliance. Click here to read the full report.
A few days ago, the Main Street Alliance asked small business owners to share what they wanted to hear the President talk about in his upcoming State of the Union address.
We asked: “As a small business owner, what policies would you like to hear the President put forward in the State of the Union Address as part of a vision for supporting small businesses and building an economy that works for the 99 percent in 2012?”
Here are some excerpts from responses we got:
Deborah, owner of a printing and design company in Oregon:
“Help Americans who are having problems with their mortgages – by helping them not lose their homes, they will have more discretionary income to spend and that income can be used to support their local businesses.
“Eliminate tax breaks for large corporations – if they are not keeping their money in the U.S., they should not receive tax breaks.
“And keep on creating jobs – we are a consumer-driven economy and without jobs, Americans do not have money to consume which causes a snowball effect and decreases sales for small businesses.”
Mario, owner of a tax preparation business in Illinois:
“Shine a light on corporate political spending that tilts the playing field against small businesses.”
Bob, owner of a professional training business in Ohio:
“Small and micro businesses do not worry about regulations and taxes. We worry about consumer demand and consumer confidence that promotes business growth. The one percent worry about taxes and regulations so they can play the system to their own advantage.”
Jim, owner of an auto repair shop in Oregon:
“We have so many hard working Americans who can't find jobs. Right here in Portland, many young people are looking for work. They joined the Occupy movement to get some attention for their plight. We have so much work that needs to be done. Teachers need to be rehired, schools and other public buildings need to be upgraded for energy efficiency. And, according to the Wall Street Journal, some of our biggest corporations are hoarding trillions of dollars right now. If they and other wealthy Americans were paying their fair share in taxes, this country would have the money necessary to engage small businesses to hire people into meaningful work, and I would have customers again. When the economy gets back on its feet, then we’ll have the tax revenues needed to pay down our deficit.”
Jose, owner of a real estate agency in Oregon:
“We, small business owners, are an optimistic bunch. We also get right to the point. We need the State of the Union address to set the tone for a great 2012. We do not have a lot of time to complain, as we have to work with the hand we are dealt. The one issue which would bring me more customers and allow me to hire more employees is comprehensive immigration reform. Our housing industry is stalled and motivating a new generation of homebuyers to enter the market will be a big step in the right direction. Our immigration system has to be fixed...let's do it right this time!”
Halcyon, owner of a retail shop in Maine:
“By reducing military spending and ending the wars, we will be able to afford to offer every citizen the basic coverages of health care, increasing job security and mobility, and business formation. We’ll be able to reduce business expenses substantially for Main Street businesses in low population, greying regions of our country – like rural Maine – and make sure fewer of our health care dollars go into the pockets of corporations and more into the delivery of health care.”
Kelly, owner of a custom woodworking business in New Jersey:
“I would like to hear the President talk about 'Real American Companies' and highlight the real contributions they make by employing people here, paying taxes here, and investing here. The President could announce a program to recognize and reward ‘Real American Companies.’ I keep thinking of a heavy machinery company that could build their machines in China, but they don’t. They have kept American jobs – high skill, high paying jobs – here, along with profits and reinvestment, so they should get a business version of the Medal of Freedom.
“This award could include a ‘Presidential Flag’ to be flown outside the corporate headquarters of companies that have won the award. Of course, we could have another award – a corporate turkey award – for companies that cheat on their taxes, move profits and jobs offshore, or manipulate the law in other ways to cheat their employees and the communities that support them.”