Small businesses struggle with health insurance landscape: 93 percent of Colorado's population is insured--but fewer than half the state's employees get their coverage through work.

• Author: Siebrase, Jamie
• Position: HEALTH CARE REPORT

There's been plenty of talk about health care since former President Barack Obama signed the Affordable Care Act into law in 2010--and more than a little debate in Washington under the Trump administration.

Last year, for example, Congress repealed the ACA's individual mandate and announced it would no longer fund cost-sharing reductions, which are high-risk adjustments designed to keep premiums low.

Business owners in Colorado are "confused and concerned," says Hunter Railey, the Colorado outreach manager for Small Business Majority, a national small business advocacy organization.

Without the individual mandate, there could be less incentive for healthy people to buy insurance in 2019 and beyond--and that could cause premiums in the individual market to spike. But Vincent Plymell, communications manager for the Colorado Division of Insurance, doubts there will be a significant jolt. "There was always a concern that the penalties for not having insurance were too small to make a difference," he says.

Although the federal government will cease funding for cost-sharing reductions, "It's still the law that insurance companies have to offer the reduction," Plymell adds.

About 40,000 Colorado customers receive the benefit, and health insurance companies compensated for their loss by raising rates. While other states loaded the extra cost on their silver plan, the Colorado Division of Insurance instructed insurance companies to spread the cost across all metal tiers, mitigating the blow to individual buyers.

These changes to national health insurance laws impact small-group employers in Colorado--but only tangentially. As the cost of health insurance on the individual market goes up, local employees might seek positions with larger companies that offer employer-sponsored health packages.

A Changing Landscape

Health insurance is a major job-related perk, and historically, it's a benefit most Coloradans have received. But as the state's population grew by more than 200,000 between 2013 and 2017, the number of people insured through an employer dropped by nearby 65,000, according to the Colorado Health Institute's 2017 Colorado Health Access Survey.

The ACA requires all large businesses to offer employee health care coverage, or pay a penalty. Small businesses--employers with fewer than 50 full-time equivalent employees--are exempt from "play or pay" penalties but are subject to rating restrictions that don't apply to large companies.

This federal...