NEW YORK New parts of the Affordable Care Act (ACA) will come into full force in eight months, and while most steel companies are sticking with the health insurance plans they currently offer employees, they arent happy about what may come next.
Nearly a dozen executives of wire fabricating businesses told AMM that they are likely to continue offering their current health insurance plans in 2014, but they predict increasing costs and organizational headaches when the law requires businesses with more than 50 employees to offer health insurance next year.
"I think its a disaster," H.O. Woltz III, chairman, president and chief executive officer of Mount Airy, N.C.-based Insteel Industries Inc., told AMM. "Regulation, complication, mandates, bureaucracyIm convinced that it will drive costs up," he said. "(But) we have no plans to pay the fine and terminate (our) coverage."
Businesses are already seeing their expenses increase. Joe McAuliffe, chief executive officer of Medina, Ohio-based Hawthorne Wire Services Ltd., said that his companys health insurance premiums have risen 20 percent, and John Martin III, chief executive officer of McBee, S.C.-based Mar-Mac Wire Inc., said he would have to pay at least an additional $21,000 in taxes in 2014 due to the law.
Sources said that most of the costs remain unseen, but an increase in premiums could have the biggest effect on business expenses.
"(The insurance companies) are going to lay low until late in the year to decide what theyre going to do on the premiums and come in more or less at the last minute. But no one knows what theyre going to do," said Martin, who is also president of the American Wire Producers Association.
Employers do not need to swallow the unpredictable new expenses. Businesses can choose to either "play" or "pay" under President Obamas health insurance law.
Companies that "play" are those with more than 50 employees that cover their employees health insurance costs, as required by the new law. But those that choose to "pay" will pay fines for ignoring the law and sending their employees to the open insurance exchanges instead of covering what many fear will be rising insurance costs.
"Theres always the alternative of just paying the fine and letting everyone shop for their own plan," Martin said. "(But) all of its so confusingto make people figure it out on their own, to pay the fine and make people do it on their own, I dont know if I can do that as an owner.
"Its not simply a dollars-and-cents decision," Martin said. "Im empathetic with these people. Its not like Im more intellectually or emotionally prepared to deal with it than they are. I want to look at it and say whats best for everybody."
Companies will have to make difficult and complicated decisions about how much coverage they want to offer their employees. Lisa Evans, director of health care at Carrollton, Ga.-based Southwire Co., told AMM that companies with high-wage employees may be more likely to pay for better plans under the ACA next year in order to remain attractive to skilled workers.
Several other steel business executives interviewed by AMM said they were holding on to their plans
"We wont modify our plan until the middle of next year. Theres so much in the air and so much left undone, its difficult to determine whats going to happen," Laurens Willard, president of Harrisburg, N.C.-based Galvan Industries Inc., said. "My personal opinion is that it cant be anything but bad."