Small businesses see increased healthcare costs

 

Tom Johnston runs the Milwaukee tech company Ascedia, and like many CEO's, his health provider notified him costs would be increasing.

"I get that message," Johnston said. "I immediately work with our PEO service to evaluate what our options are."

They outsource HR to EMpower in Milwaukee, which represents more than 200 businesses, and say most are seeing an increase, but some more than others.

"Thirty, forty, fifty percent shockers," EMpower Principal Paul Salb said.

Empower was able to get the increase down from 25 to 13 percent for Ascedia. Empower Principal Paul Salb says uncertainty surrounding the Affordable Care Act is causing increases.

"Insurance markets tend to price up for uncertainty, so that they build, understandably, they build in a hedge over what could happen over the next twelve months," Salb said.

He says healthcare laws have such an impact because the same companies that provide individual marketplace insurance provide private group insurance.

"When people try to look at it as separate puzzles, they're making a mistake," Salb said. "The individual market affects the small market, which affects the large market."

Johnston says Ascedia splits the increase with employees, but not everyone does.

"Some businesses completely pass off that cost to employees, so come open enrollment period, it's like, ok, your costs are going up."