Millions of Americans—at least 3.5 million, to be exact—have been notified that their current individual health insurance policies will be canceled due to Obamacare. But there’s more trouble brewing on the horizon: Small employers are now finding out their policies will be voided as well.

Courtney and Matthew Dunn, owners of DunnOrthodontics in Phoenix, just received a letter from their insurer, Humana, saying that the current health insurance policy for their 13-employee business will be terminated because it doesn’t comply with Obamacare rules. Instead, Humana offered them a replacement policy that would carry a 60-percent higher premium.

The Dunns have turned to their insurance broker and other small business owners for guidance on what to do, but say they are bewildered by the news. "I’m trying not to overreact to it," Matthew Dunn told National Public Radio’s Marketplace. “I’m trying to figure out what’s best for us and our employees, but I just don’t know right now."

Insurance experts predict that many more small businesses will receive similar Obamacare cancellation notices in the coming weeks and months, despite President Obama’s earlier promises that current policies would not be terminated due to Obamacare.

Some small businesses have found a way to prevent their policies from getting canceled and avoid large premium hikes—at least for now, according to Forbes. A loophole in Obamacare allows small groups to renew their policy before the end of 2013 and keep that policy through 2014 without worrying about Obamacare compliance. That means many small employers who take advantage of that loophole likely won’t get policy cancellation notices from their insurer until next fall. (Insurers are required to give employers at least 90-day notice of policy cancellation under federal HIPAA rules.)

Reports suggest that many small-group policy premiums will likely rise dramatically once they are subject to Obamacare rules. Aetna has already warned business owners in its marketing materials to expect large premium hikes: “Factors such as essential health benefits, maximum plan deductibles, the application of new taxes and fees and new rating rules will combine to push insurance premiums up substantially for some small businesses,” it said. Aetna CEO Mark Bertolini predicted last year that small employers seeking coverage through the public health insurance exchanges could see premium increases of 20 percent to 50 percent.

It’s possible that Congress will help relax the rules and introduce legislation that allows small businesses to keep their current insurance policy, Forbes reports. Some Democrats are concerned that many business owners will receive their cancellation notices right before the November 2014 mid-term elections, hurting Democrats’ chances of victory.

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