Small businesses wrangle with health reform and what it means for them

Harris Mithoug said he had a simple solution to the challenges of life without health insurance: Don’t get hurt.

The 31-year-old bartender at The Onion restaurant in Spokane did not for the five years he went uncovered – a lucky streak that ended with a hand fracture repaired on the dime of Premera Blue Cross, which insures his spouse.

Mithoug said he priced insurance but found only plans with high deductibles within his financial reach.

“I didn’t think it was cost-effective,” he said.

The Onion manager Tori Allen, 32, went bare for three years before signing up for the health savings account offered through owner Landmark Restaurants.

Allen, like Mithoug, stayed healthy, but she said she will welcome the protection the newly enacted health care bills will provide, even if it comes at some cost to her.

Food service will be among the industries most affected by health care reform. But most businesses and business organizations are just starting to digest the legislation’s 2,000-plus pages.

To help, some have posted question-and-answer analyses on their Web sites, or conducted webinars. Regulators, including the Washington Insurance Commissioner’s Office, have also marshaled basic information.

Spokesman Rich Roesler said Commissioner Mike Kreidler has been huddling with his peers from other states as they set guidelines for insurers, who will have to file new rate plans that reflect changes that take effect this year. Lifetime limits on coverage, for example, must be eliminated, and insurers will not be allowed to deny coverage to children with pre-existing conditions.

Rate increases are likely, Roesler said, but the changes in Washington may be less than in other states because some of the federal requirements are already in place and built into existing rates.

The office has been fielding calls from consumers who want to know when they will be able to buy insurance, he said, adding, “We’re not hearing at all from business on this.”

Association of Washington Business President Don Brunell said that organization and others are just starting to break down the reforms for members.

“This is a whole new world.” Brunell said. “The bottom line is we don’t have a lot of information.”

He said problems plaguing Massachusetts, which implemented reforms four years ago, may be a sign of trouble ahead. The Massachusetts plan is considered a model for the federal program.

Anthony Anton, president of the Washington Restaurant Association, said his industry had supported the reform effort early but backed away as provisions were added that will transform the way restaurants manage workers, and how workers manage themselves.

Like Mithoug and Allen, many are young, Anton said. They want schedules that are flexible, that allow them to trade shifts on short notice, or skip a week for school exams.

He said employers will have to keep tighter rein. Anyone working more than 30 hours a week will be considered full time, and hours worked by part-time employees will be combined to determine equivalents to full-time workers.

Most provisions of the reform law kick in when a company’s payroll exceeds 50. To avoid crossing that threshold, and to simplify recordkeeping, restaurant operators probably will press workers already considered full time to work more hours, minimizing the need for part-timers, Anton said.

He said employers also will have to know why an employee might not want insurance — because they are covered by a spouse or parent, for example — to avoid triggering a fine.

How costly providing health care might become will not be known until insurers begin to account for increased coverage requirements by raising premiums, he said.

For businesses with fewer than 25 employees, each on average earning less than $50,000, the law provides an attractive incentive that will kick in this year, Anton noted. If they pay at least one-half the policy premiums, they will receive a 35 percent tax credit.

Ken Belisle, a partner in Landmark Restaurants, said he participated in a webinar last week in an effort to understand the reforms as best as possible.

“This is as aggressive a program as we’re ever undertaken in this country,” he said.

Although not a supporter of reform, Belisle said Landmark will acquiesce, even if the effort requires hiring someone just to monitor compliance. “There’s just an enormous amount of unanswered questions,” he said.

Belisle said Landmark, which also owns two Frank’s Diners in Spokane, employs 167. The company pays the premiums on health savings accounts for managers, he said.

He said the law will make restaurants the stewards of their employees’ welfare.

“I don’t think I thought about insurance until I was 35,” Belisle said.

Retailers, who employ one out of five workers, will face the same scheduling issues, but not to the extent restaurateurs will, said National Retail Federation Vice President Neil Trautwein.

He said retailers are just beginning to understand the reform bill’s requirements.

“It’s going to get very complicated,” Trautwein said, and one way employers may try to simplify their operations is to lay off people.

“They’re looking at a freight train coming down the track and they are not very happy about it,” he said.

But Trautwein added that there are positives to the legislation, notably provisions that encourage wellness. And he said there will be opportunities before the bill takes full effect to work on modifications in Congress, and with regulators writing the rules that will guide implementation.

Meanwhile, Trautwein said, “There is a fair amount of anticipatory sticker shock.”