East TN companies impacted by Affordable Care Act mandate

A new federal ACA law taking effect this year impacts businesses

The new year marks the start of a new era for businesses under the federal Affordable Care Act, or ACA.

As of Jan. 1, companies with 100 or more employees have to provide affordable health insurance to at least 70 percent of its eligible employees. Companies with 50-99 employees have one more year to comply.

A Knoxville business has been working on meeting the requirements for the past three years.

"The main way it's affected us is we've seen our rates skyrocket. Over the last three years they've probably gone up 15 percent to 18 percent," said Terry Turner, owner and president of All Occasions Party Rentals in West Knoxville.

According to Turner, the company has always provided health care for its employees, at some level, but now they are covering 50 percent more employees.

"Over the last three years, out-of-pocket for me has probably been close to an additional $30,000 - $40,000 as a small company," Turner said.

Employers with less than 50 workers do not have to face the mandate.

All Occasions Party Rentals hovers right around the mandate level.

However, a couple years ago Turner created another company, All Convention and Expo Services. The federal ACA business mandate requires owners to combine all companies - putting Turner's companies over 50 employees.

Currently, 45 eligible employees are receiving health insurance through the company's plan.

"It's unnerving for a lot of small business owners, and I'd like to see some numbers on how many small businesses are maybe not able to grow because they don't want to hit that threshold of the mandate, and so they're holding themselves back and that's not a good reason to hold your business back," Turner said.

This year, the company introduced a new plan that is partially self-funded as a way to cut overall costs.

"I have a very strong opinion on anything that's sort of forced upon us as small businesses. I feel like it's not a fair approach," Turner said.

He went on to say, "You have companies that have been doing the right thing for a lot of years and we seem to be penalized."

According to the Internal Revenue Service, businesses with 100 or more workers who do not provide affordable health insurance for full-time workers in 2015 could face a penalty of $2,000 per employee.


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