Brokers Cite Potential Problem for Small Businesses Offering Health Coverage

New Jersey insurance brokers are raising concerns that some small businesses could be forced to drop insurance coverage for their employees if too many workers chose to buy federally subsidized individual health insurance.

Under state law, a small business must have at least 75 percent of its employees participate in its insurance plan in order to offer coverage to employees. But brokers say that some businesses would drop below that 75 percent level if even just one employee dropped employer coverage to buy coverage available through the Affordable Care Act.

“We are concerned about this because it’s going to affect a lot of small groups who want to do the right thing,” said Matthew Roy, president of Red Bank employee benefits broker Blue Ocean Benefits and Consulting.

The 2010 ACA established the insurance marketplace, in which people can buy health insurance for themselves and their families and learn whether they are eligible for tax credits to subsidize the purchase. Small businesses will be able to purchase insurance through a separate health insurance exchange, called the Small Business Health Options Program, or SHOP.

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