Bartender Alexandra Frederick was worried that she would lose her parents’ health insurance coverage once she turned 27 last year. But thanks to new incentives for small businesses under Obamacare, and a thoughtful group of employers, she hasn’t lost a day of her coverage.
“The timing worked out very well,” said Frederick, who has worked at Liberty’s Bar and Bottle in Over-the Rhine since it opened in 2014. While she has to work a set amount of hours to qualify, having health insurance is important to Frederick. “I feel very grateful that I’m able to have a job where I’m offered health insurance,” she said. “It’s 100 percent part of the reason why I work here.”
The Patient Protection and Affordable Care Act, commonly known as ObamaCare, signed into law in 2010, offers American citizens access to health insurance and curbs spending through regulations and taxes, according to Obamacarefacts.com. The new laws also include tax breaks for small businesses who offer health insurance to their employees.
One local business to step forward is Liberty’s Bar and Bottle, where owners Garth Lieb, Jeremy Moore and Tom Stephen also manage and work behind the counter with their two other employees. The beer-and-wine bar on Main Street stands out as a small business that provides health care to all its workers by covering $200 towards each employee’s insurance premium.
While not required by law, Lieb feels it is the right thing for the partners to do. “We’ve had jobs where we were taken care of as well as jobs where we weren’t as much,” he said. “We should take care of our employees, like we felt we should have been along the way.”
Lieb’s attitude also makes financial sense. Providing affordable healthcare for employees not only keeps them healthy, but ensures a stable, positive workplace. Preventative care and yearly physicals can reduce long periods of employee absences caused by illness.
Furthermore, the healthcare benefit is considered one of the most attractive benefits for recruiting and retaining employees, thus helping ensure the business remains competitive, according to website Business Owner’s Toolkit.
Employers who offer employee health insurance may also save on their own health insurance premiums and take advantage of new tax incentives.
Obamacare extends beyond individual coverage to include businesses. Employers with more than 50 employees are required to offer health care to full-time employees who work more than 30 hours per week or face a penalty. Not all employers are happy with a new regulation, notably Papa John’s CEO John Schnatter, who told Fox News in 2012 that he would be “forced to cut employees’ hours.”
But what about smaller businesses with even fewer employees? For businesses with less than 25 full-time employees and that are earning less than $50,000 in average annual wages, Obamacare offers a tax credit up to 50 percent of what the employer pays toward employee health insurance premiums under qualifying plans.
Several states offering Obamacare, including Ohio, have passed small employer programs that help small employers buy health insurance for their employees for lower rates. Some benefits include guaranteed renewals and limits on increased rates as well as setting up low cost policies.
Given these benefits, it makes sense for small business employers to turn to the state-sponsored marketplace, a place where small businesses can go to learn about their health insurance options, if they’re not able to obtain an affordable single policy plan covering all their employees. They benefit as long as they pay at least a percentage of the cost of an insurance premium.
According to the website Zanebenefits, there are currently 6 million businesses in America with fewer than 200 employees, which is 82 percent of all employers. What is surprising is that 62 percent of these employers have fewer than 10 employees, and only 56 percent of those employers offer employer sponsored health insurance.
But how does that affect the bottom line for the business? The cost is manageable, Lieb said. He acknowledges that the cost for a much larger business could be substantial, but “the more employees you have, the more money you’re making in sales.”
While Lieb knows of only a few other restaurants and bars that offer health insurance to its workers, such as Salazar’s and Mita’s, both located in downtown Cincinnati, he believes more should join in.
“I feel like it’s something most bars and restaurants could afford to do,” he said. “I think it’s part of what we’re transitioning into. And the health insurance doesn’t even need to be covered 100 percent. There’s a middle ground. I think it’s important that everybody in this country is insured as far as healthcare.”
Conrad Wolfe recently graduated from the University of Cincinnati with a degree in journalism.
Conrad interned with C4AD during the first quarter of 2016.