Jody Manor has run a small cafe and catering company for nearly three decades in Old Town Alexandria, only a few blocks from where he was born. Six years ago he purchased an adjoining building, and more recently he started searching for a second location.

Whether he moves forward with expansion depends on the price tag of the requirements mandated by the Affordable Care Act, President Obama’s signature health-care initiative.

Manor’s company employs 45 people. If he brings in just five more, his business would soon be subject to new minimum coverage standards under the 2010 law — and he does not know whether his current health plan would meet this threshold of coverage or how his premiums might be affected.

“These changes are less than a year away, and I still have no information about how much our premiums are going to cost,” said Manor, owner of Bittersweet Catering, Cafe and Bakery. “It definitely gives me pause when thinking about adding another location.”

Nearly three years after the health-care law was passed, federal regulators have only recently begun to define its terms. Major pieces of the overhaul, such as state-run exchanges that will serve as marketplaces for qualified health insurance plans, have yet to take shape, and several rules remain unwritten. Consequently, the picture remains anything but clear for small-business owners, some of whom have been warned that their premiums may spike and that their current coverage may fall short.

“There is tremendous confusion and fear among many of my competitors and other business owners in my network, particularly about what you have to cover and how you have to report,” said Hugh Joyce, owner of James River Air Conditioning in Richmond. “In speaking to them, I am convinced that the primary reason we aren’t seeing a robust economic recovery is the uncertainty and costs associated with this health-care law.”

Others are not so critical. They argue that the measures promise to rein in soaring health-care costs and provide a safety net to small businesses and employees, many of whom would be able to buy insurance through the exchanges.

The Department of Health and Human Services three weeks ago issued a final set of regulations on the minimum value for health insurance packages, mandating that plans cover at least 60 percent of health expenses and 10 primary areas of care, including maternity, ambulance and prescription services.

Joyce, whose company employs 150 people, provides what his insurers tell him will “probably qualify” as adequate coverage under the new rules, but he isn’t certain.

If his current plan falls short, experts say he won’t be alone in deciding whether to find a suitable alternative or pay a penalty.

The minimum-benefit plan mandated by the law “is broader than what’s currently offered by a lot of small businesses,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group for providers.

Zirkelbach warned that even firms that already offer sufficient coverage may see their premiums surge under the health-care law. New rules that restrict how insurers can structure their rates could drive prices higher across the board, he said, while small firms could be hit indirectly by a new fee on insurance providers, which some fear will be passed along to individuals and small employers in the form of higher premiums.

Questions about coverage

The situation only gets thornier for Joyce, who also owns a small art gallery with one full-time employee. Rules proposed this year by the Internal Revenue Service suggest that workers from separate firms owned by the same person will be totaled to determine an employer’s ultimate size. If so, Joyce will probably shift his gallery employee to part-time hours to avoid having to add coverage at his second business.

The IRS proposals include formulas for factoring part-time and seasonal workers into employee totals and calculating the penalty for failing to provide coverage — but none of the rules are set in stone, nor has the agency determined how employers will prove they provide adequate and affordable plans. The IRS is still collecting comments on the proposals and plans a public hearing in late April, so the final rules are not likely to be published until summer.

Meanwhile, many employers have seen their premiums rise or plans disappear as insurers prepare for the coming changes.

One in eight small-business owners who responded to a survey by the National Federation of Independent Business said their health insurance providers had notified them that their plans would be terminated. A study released last week by Adecco, a human resources consulting firm, showed that nearly a third of employers said they stopped hiring or cut their workforce because of the law.

Hoping to help small firms combat the rising costs, policymakers included a health-care tax credit for small businesses in the Affordable Care Act. Through the end of this year, the provision was meant to provide a tax break of up to 35 percent of health-care costs for tax-eligible small employers and 25 percent for tax-exempt groups such as charities. Next year, the credits are slated to rise to 50 percent and 35 percent, respectively.

But many have complained that an onerous application process has deterred business owners from claiming the credit, and the Government Accountability Office reported in May that only 170,300 of the nation’s 1.4 million eligible firms claimed the break in 2010.

More recently, the automatic spending cuts known as sequestration forced a temporary 8.7 percent reduction in the health-care credit for some tax-exempt employers.

Weighing the possibilities

James River Air Conditioning doesn’t qualify for the break, because the relief is limited to firms with no more than 25 employees. Joyce says his provider, Anthem Blue Cross Blue Shield, told him to expect an 18 percent spike in his premiums next year — higher even than the roughly 15 percent increases the firm has experienced each year since 2010.

“If our cost trajectory continues, in five to seven years the premiums will eat up all my net profit,” Joyce said. “It’s already hard out there right now, particularly for small and medium-size businesses. This may be the straw that breaks the camel’s back.”

The additional uncertainty is the last thing that Perry Casto, owner of Warrenton-based Allied Associates International, needed right now. His company, which provides cyber-intelligence and training services to the Defense Department, employs 70 people but has stopped hiring in light of federal budget cutbacks.

Casto’s firm may be particularly vulnerable to premium increases because many of its employees are young. Starting next year, the law mandates that insurers can no longer charge the elderly more than three times what they charge younger people for the same coverage.

Cori Uccello, senior health fellow at the American Association of Actuaries, says that could force insurers to raise premiums for young people to make up for the lower rates they can charge the elderly. Consequently, “employers with a younger worker population may be likely to see a higher increase in rates,” she said.

Casto’s business can probably absorb a 10 percent or 15 percent uptick, he said, but if annual premium increases approach 30 percent, “everyone will probably get less coverage.”

Manor, the Alexandria restaurant owner, says he would delay expansion before cutting back on coverage or moving employees to part-time status. That’s partly because the health-care perks he offers have been vital in helping his company retain some of its best employees.

“When you have people here 25 years, and you have seen them get married, have kids and build families, you don’t start cutting away at their health care,” Manor said. “We’re basically one big Latin family, and that’s just not an option.”

Before he came to work at Bittersweet 12 years ago, Jeffrey Allen, an executive on the sales team, said he received various types of health insurance from previous employers, none as generous as the plan he has now. He said his HMO allows him to book appointments online and expedites lab work and doctor visits.

“At my age, I basically work for my health insurance,” said Allen, who is 53.

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