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NFIB slams new Health Care Grandfather rule

June 18, 2010

Grandfathering Rules Eliminate Choice, Flexibility for Small Businesses
By National Association of Small Business

WASHINGTON, D.C., June 14, 2010 — Susan Eckerly, senior vice president of the National Federation of Independent Business, America’s leading small business association, issued the following statement in response to the latest rules on grandfathered health plans under the Patient Protection and Affordable Care Act.   “A lot was said today about choice and flexibility and ‘keeping what you like’ under the new healthcare law. However, today’s latest rules on grandfathered plans mean small businesses will be left with even less choice and flexibility. Instead, they will be faced with the difficult choice of paying more to maintain grandfathered coverage, shopping for a new (and more expensive) plan or possibly dropping it entirely.

“Despite claims, the restrictiveness of these regulations removes the already limited choices small businesses have to try to keep up with the ever-increasing cost of plans. Currently, when small business owners are faced with premium increases – often in the double digits – they are forced to evaluate their budget and their employees’ needs to determine how they can best adapt to this increased cost. These decisions are difficult, and are even harder in this economic environment.  I hardly think we want small business owners to be choosing between being able to maintain their current healthcare plan or hiring a new worker in the coming year.

“America’s small businesses and their employees are the healthcare consumers we keep talking about. The insinuation that small businesses are heartlessly passing on huge cost increases to their employees is a stretch. When an increase comes, employers often discuss their options and possible changes with their employees. Some time they choose to make a modest adjustment, for example (p. 104), increasing a deductible from $30 to $45 – I would hardly call this a ‘drastic change.’

“Sadly, what is coming of this healthcare law is a series of consequences that will result in severely negative outcomes. The government’s own analysis (page 54) confirms what we fear most, that small firms are taking it on the chin: with upwards of 80% of small employers who could possibly lose the plan they chose by 2013 – this is certainly not ‘keeping what they have.’

“These rules limit flexibility and severely restrict the last line of defense for an employer before making the difficult decision of having to employ the nuclear option: dropping coverage all together. This is another heartbreaking and discouraging outcome from this new healthcare law.”

  
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