Small businesses brace for health care reform impact
The Affordable Care Act was signed into law in 2010, but employers and health care providers are just now starting to brace for impact. Last Thursday, the Rhode Island Health Benefits Exchange brought those stakeholders together for a Small Employer Taskforce summit to discuss how reform will be felt locally.
The goal of the Exchange is to support health care reform, providing all Rhode Islanders with access to health care, but to do so affordably and in a way that allows employers to predict costs.
“We will advocate for high-quality, low-cost health insurance options,” said Christine Ferguson, who was appointed to director of the exchange in June of 2012.
At least in year one, the Exchange is only available to businesses with 49 employees or less; larger businesses must seek coverage independently, and are subject to penalties if they do not offer insurance for their employees. In later years, larger businesses might be eligible to join the Exchange, which negotiates for affordable insurance options on behalf of businesses. The Exchange also serves as a clearinghouse of sorts, connecting individuals and employers with resources on health care options, eligibility for tax credits and more.
“Our main goal for small employers is predictability and the ability to plan what your costs are going to be. Our job is to know what people want,” Ferguson said, noting that the Exchange can then represent those interests with insurance providers. In Rhode Island, that includes United Healthcare, Blue Cross and Blue Shield, Tufts Health Plan and Neighborhood Health Plan of Rhode Island.
Ultimately, Exchange leaders hope to achieve near universal coverage, coinciding with the goals of ACA. Even if a small employer does not offer insurance, individuals must purchase it, and individuals can therefore tap into Exchange services.
“You won’t have to provide health insurance, but your employees do,” said Health Insurance Commissioner Christopher Koller.
There are few exemptions, such as very low-income individuals, religious beliefs and residence on a Native American reservation.
“Most individuals will have to be able to demonstrate that they have coverage,” Ferguson said.
Ferguson believes the Exchange could ultimately be a “catalyst for change,” when it comes to health care delivery and access.
Most businesses will really start to feel the effects of reform and the Exchange, if they are involved, in the fall of 2013. Enrollment begins Oct. 1, and the mandate kicks in starting on Jan. 1, 2014, as do the available tax credits and subsidies.
Small employers have two options through the Exchange. They can either pick a carrier and a plan and enroll their employees in it, or they can indicate how much money they are willing to put up, and the Exchange or a broker can identify options for employees, who then have a choice of multiple plans. If an employee chooses a plan that is more expensive, they bear the additional cost. Conversely, if they choose a less expensive plan, they pay less.
The Exchange’s website, which goes live in October, will eventually break down those plans and associated costs, but Ferguson says “boots on the ground” are just as important, and will be available to sit down with employers or individuals one-on-one. Transparency, she said, is crucial.
“In every model that comes up, you will see, ‘this is what my employer is contributing, this is what I’m contributing and this is the total cost,’” she said.
Aside from access to health care, the Exchange is designed to support ACA ideals surrounding preventative medicine. With the help of employers, they want to track the benefits of preventative care, translating that into tangibles surrounding absenteeism and productivity.
“The money that’s being invested in this, we have to be able to turn around and say, ‘we achieved something with that,’” Ferguson said. “Our goal is to be able to say this investment achieved something more than just making sure people have health insurance.”
Health care reform is a scary concept for some employers, who are still unsure of how they will be affected. At Thursday’s forum, Vinny Ward, who owns a home nursing care agency in Woonsocket, said he hasn’t even been able to identify if he is eligible for Exchange services. He has 65 total employees, but many of those are part-time, and he isn’t sure how to calculate full-time equivalents.
“I don’t know what the future holds for the Affordable Care Act,” Ward said.
Koller said they would get Ward an answer, but noted that his question is not uncommon.
“A lot of these laws are not ours; they’re federal laws,” he said. “We’re trying to interpret them just as you are.”
The Exchange is currently in the development phase, soliciting stakeholder input and negotiating over plans. In July, they will kick off a public education campaign in advance of October’s enrollment period. Coverage then kicks in, in January, and the Exchange will double back to review effectiveness after that. For more information, visit their website or share your feedback at firstname.lastname@example.org.