Small businesses fret over details of law

April 1, 2010 at 12:00a.m.

Associated Press

BOSTON

Small-business owner Joe Ascioti says Massachusetts’ 2006 health-care law has left him facing $15,000 in fines since it took effect. Now, he’s worried the nation’s new health-care overhaul could bring similar woes to employers nationwide.

Massachusetts’ law, which mandates near-universal coverage and requires that businesses with 11 or more workers offer insurance, provided the blueprint for the health law signed by President Barack Obama. Massachusetts employers who don’t comply face annual fines of $295 per worker.

Though there’s been plenty of grumbling among business owners that the state law has squeezed them financially during a tough recession, there’s little evidence the law is forcing employers to close or sending them fleeing for the state line. Other businesses have welcomed the law, and business leaders helped guarantee its passage.

Drawing parallels between the state and national laws is tricky. Though both share many of the same tenets — requiring businesses to shoulder more of the burden of health coverage — there are major differences.

The national law doesn’t require businesses offer insurance but hits employers with 50 or more workers with an annual $2,000-per-employee fee if the company doesn’t insure them and the government ends up subsidizing their workers’ coverage.

The national law also grants tax credits for businesses with 25 or fewer workers with average annual wages below $50,000. And beginning in 2014, businesses with up to 100 employees will be able to pool their employees in state-created insurance exchanges to increase their negotiating clout with insurance companies.

For critics, one of the most troubling aspects of the laws is the fines. Massachusetts has already fined more than 1,000 companies more than $18 million for failing to offer medical insurance to their workers.

Such penalties make Doug Newman, owner of Newman Concrete Services in Richmond, Maine, nervous. In the past 18 months, Newman’s work force shrunk from 125 employees to just 25.

He is worried that once the economy turns and he begins to hire back workers, he’ll face a critical decision when he nears the 50- worker mark and is no longer exempt from penalties. Newman now pays 60 percent of his employees’ individual premiums and 40 percent of their family premiums.