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Small Firms Uneducated on Health Care Reform

NEW YORK ( MainStreet) -- When it comes to health care reform, small firms are largely unaware of the potential benefits, according to a survey released Wednesday by eHealth (EHTH - Get Report), the parent company to eHealthInsurance.

Not knowing the effects of having an online health insurance exchange in their state come 2014 means most firms aren't making any changes or long-term plans regarding their employee health insurance coverage, the survey shows.

Beginning in 2014, the Patient Protection and Affordable Care Act of 2010 requires businesses with 50 or more full-time employees to provide health insurance coverage for their workers. Businesses with fewer than 50 employees are exempt, although employees may be required to buy their own coverage.

Only 22% of small employers considered themselves well-informed about the coming state-run online health care exchanges. Approximately 6% say they plan to drop health insurance coverage for their employees once the reform goes into effect in January 2014, the survey says.

"The health insurance carriers are starting to change some of their health plans now," says Sam Gibbs, vice president of eHealth and president of its eHealth Government Systems unit. "What employers need to do right away is to start shopping around, because there are some new plans -- there's higher-deductible plans [and] there's the opportunity to add some supplemental insurance products."

While approximately 88% of the survey's respondents say they had 10 employees or fewer at their company, the majority of firms say they plan to continue offering coverage for their employees in 2014.

The high cost of providing coverage is the primary concern for small-business owners. Small firms feel in a bind, since offering health insurance to employees is a critical component to recruit and retain talent. More than four in 10 respondents say they also feel a moral obligation to provide health insurance benefits to their employees, according to the survey.

According to the survey, more than three-quarters of the respondents say they spend more than $200 per employee per month on health insurance premiums for employees and their dependents. Of those, 23% say they spend upward of $500 per employee per month, eHealth says.
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