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Small Business Needs Obamacare

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Before we're overrun by dueling constitutional lawyers, can one entrepreneur please weigh in on the fate of the president's health care law? Because lost in the political and judicial feud is a little known fact: small businesses are placed at a fundamental competitive disadvantage today by the way America's health care system favors large employers. The Affordable Care Act fixes this. For small firms, Obamacare's survival is therefore central to their own.

I know this from personal experience. I founded a firm several years ago that's a market leader in the new field of supplying high-end project professionals on demand to the Fortune 1000. Our firm has created 25 high wage American jobs to date, and we expect to create dozens more as we grow. Yet my business -- precisely the kind of small, growing firm that politicians hail as the source of most new job creation in America -- is now at risk because we can't arrange health coverage for key employees.

Like many scrappy start ups, my company decided that providing health care wasn't practical at the outset -- it was expensive, as well as a distraction from the essential work of proving out our business model. As we've established ourselves, however, it's become clear that to compete for the best talent we need to include health care in our offer, because great people have big company alternatives where such coverage is the norm. In every other wealthy nation, of course, this burden is not placed on employers -- the government makes sure individuals can acquire group insurance coverage directly, either via private insurers (as in Holland and Switzerland), state run pools (as in Canada or the UK), or some hybrid.

Let's stipulate that it's crazy in the 21st century to make employers responsible for this central social welfare function. As long as that's the norm in America, however, at some point a firm like mine seeks to evolve past a situation in which most of our team arranged for health care on their own or via spouses or parents who had coverage from larger firms. We're generating enough cash to offer health care ourselves. That's where the trouble comes in.

My company expanded quickly, and now has employees spread out in California, New York and Texas. There are only a few national insurers who offer small group coverage to firms like ours, because of the complexity and hassle of state-based underwriting rules. Only one of those would even take an application from us. That firm turned us down the other day because, while our team is relatively young and healthy, some of our employees were deemed to have pre-existing conditions. As a result, we may now lose key employees who obviously can't go without the health security a much larger company's risk pool can guarantee.

It should be obvious to every capitalist that this state of affairs is bad for entrepreneurship, bad for innovation, and thus bad for the economy. The hopeful news, which I only learned once we were denied coverage, is that the state insurance exchanges established by President Obama's health reform will offer a solution for firms like ours. We could access these exchanges as a small firm with fewer than 50 employees, or our employees could access them directly. But not until they open for business in 2014. Our first thought was: maybe we can patch together some solutions for our key people until then. That is, if the Supreme Court doesn't overrule the whole thing.

Which brings me to the Republican presidential candidates. Every time they say they'll "repeal Obamacare on day one," I hear them saying "your company is doomed to being uncompetitive in the market for talent in perpetuity." Obamacare's exchanges solve this problem, just as Romneycare's (on which they were modeled) did in Massachusetts. This isn't about ideology or politics. It's about small firms' ability to recruit and retain employees in a country where the deck is already stacked senselessly in favor of big business.

Republican candidates like to sing the praises of entrepreneurs. But do they really want people like me spending our time figuring out health coverage instead of growing our businesses?

The brokers we've worked with say our only option at this point is to work any connections we have at the health plans to get our denials reversed. They make exceptions all the time, I'm told -- you just have to know someone. I'll do what it takes to protect my firm, but what kind of banana republic have we become when this is what's expected?

Mitt Romney deserves special scorn here. He knows all this. He fixed the problem in his state. He's just thinks it's too risky to explain it to Republican primary voters. If that's the way you want it, Mitt, fine. But then I need you to pick up the phone, call the CEO of Aetna or United Healthcare, and solve my problem.

Ms. Miller, based in Los Angeles, is co-founder and CEO of Business Talent Group.