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Gut punch: Mom-and-pop businesses losing insurance under Obamacare

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Paul Bedard,Washington Secrets,Obamacare,California,New Jersey,Health Care,Healthcare.gov,Health Care Exchanges

Dwight “Bone Daddy” Perkins never saw the Obamacare punch coming.

The owner of a husband/wife beverage company in California, Perkins had the best and most expensive Kaiser Permanente small group plan available. He was aware that some cheaper plans were being cancelled because they didn’t offer everything required in President Obama’s Affordable Care Act, but his was solid gold — and $23,000 a year.

“I thought I was covered,” he told Secrets. “I've got the best plan,” said the owner of Big Wave Beverage Company, makers of mixers like “Dr. Swami & Bone Daddy's Ultimate Margarita.”

On Jan. 21, the gut shot hit. Kaiser sent him a letter canceling his policy because of Obamacare. The reason: Mom-and-pop shops that have no employees aren’t eligible for group health plans anymore, regardless of the quality of the plan they had.

“It had nothing to do with the type of insurance coverage I had. I had the best,” said Perkins, who added that he “loves” his Kaiser doctors. “According to our president, and everybody that was a part of the ACA, people who had insurance would only be kicked off their plan if it was insufficient,” he said in frustration.

The alternative offered by Kaiser will cost Perkins $6,000 more a year and have spending limits, something his old plan did not.

In their letter, Kaiser said, “Under the ACA and California regulations, beginning January 1, 2014, small businesses must have at least one ‘common law’ employee who isn’t the owner or owner’s spouse (or domestic partner) to be eligible for small group coverage.”

Gone from coverage, added Kaiser: “Owner-only business” and “Husband/wife business.”

And it’s not just in California. Horizon Blue Cross Blue Shield of New Jersey has this warning on their webpage: “Sole proprietors with no employees (or whose only employee is a spouse) are not eligible to purchase coverage through SHOP. To be considered a group health plan, the plan must have employees among its participants. In determining if a group health plan exists, federal law does not classify an individual and his or her spouse as employees when the trade or business is wholly-owned by the individual or by the individual and his or her spouse. When a sole proprietor and/or a spouse-employee are the only enrolled employees, the health plan is not considered a group health plan.”

Perkins said that even if he had employees, Kaiser would have cancelled his plan unless the workers were also on his gold-plated policy.

“To be honest, I am livid,” said Perkins. “Our president stated, ‘You can keep your health plan and your doctors,’ Turns out that was a complete lie. Our president, when caught in this lie, then goes into damage control and states, ‘The reason why people are losing their health plans is because they are inadequate.' This also turns out to be a complete lie.”

Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.