How do Small Employers View the SHOP Exchanges?

A new study, being released today as a Web First by Health Affairs, surveyed 604 randomly selected firms--including both firms that currently offer insurance and those that do not. One clear message was that health insurance cost was by far the most important factor in purchasing decisions. Some of the study's findings:

• Employers liked features of the SHOP exchanges, including getting one bill; writing one monthly insurance check; and the ability to compare costs, benefits, and physicians in networks among plan offerings. 
• The proportion of employers willing to shift to narrow-network plans that contract with no more than 25 percent of the providers in a community rose to 82 percent with a cost savings of 20 percent. 
• Eighty percent of small-group employers offering insurance said they used brokers to perform various tasks, including selecting and managing their health insurance plans. 

The authors found two challenges to the SHOP exchanges: the need for a strong buy-in from brokers and an expected increase in the number of self-insured small employers. Under the ACA, self-insured plans do not have to provide essential health benefits or pay premium taxes. "This survey quantified a much-discussed unintended consequence of the Affordable Care Act: a movement to self-insurance, which poses a threat not just to SHOP exchanges but to the entire small-group market," the authors conclude. They recommend an amendment to the ACA: prohibiting the sale of stop-loss coverage (against catastrophic events) to small firms. This would avoid undermining many benefits of small market reforms and SHOP exchanges.

Small Businesses Unaware of Exchange Notification Requirements

Bloomberg Businessweek reports that, though the deadline is less than a month away, many small businesses don’t know they have to notify employees about the health insurance exchanges in their states. Small business owners are either unaware of the requirement, or are under the misconception that it doesn’t apply to them because they’re too small to be governed by the health care reform law’s mandate. But the notification requirement applies to any business regulated under the Fair Labor Standards Act, which covers all companies with at least one employee and $500,000 in annual revenue. Penalties for businesses that don’t comply could reach $100 per worker per day.  The notifications must be supplied by October 1, 2013.

HHS Unveils ACA Website Geared Toward Businesses

HHS has established a new website specifically geared toward helping businesses understand the Affordable Care Act, including their obligations and opportunities under the Act. The site includes a wizard tool that is tailored based on size and location, so businesses can learn about options for providing affordable coverage options to their employees. The site is intended to be a user-friendly hub that connects employers to informational content on tax credits and other provisions of the law from the Small Business Administration, the Department of Health and Human Services (HHS), and the Treasury Department.

The Administration has promised to work with the employer community to ensure the site continues to be a helpful resource for businesses and their employees, including updating the site with additional, timely information.

Insurer Sees Small Employers Dropping Health Coverage, Shifting to Self-Insured

As the nation prepares to roll out the next phase of the ACA, the second biggest medical insurer - Wellpoint - said that it expects to lose members in health insurance plans sponsored by smaller employers. At the same time, the company expects membership gains in self-insured employer plans and in the kind of individual plans that will be sold in the public exchanges starting Oct. 1.

The lost customers aren’t just signing up with WellPoint rivals; some of it is going into the uninsured ranks. The Obama administration recently postponed enforcement of a requirement that employers with 50 employees or more offer health coverage next year or face fines. But the delay in the “employer mandate” wasn’t the reason WellPoint gave for losing small-group members. Nor did executives respond directly to analyst’s questions about whether small employers are “dumping” workers into the subsidized individual market. Rather, small employers have hesitated to buy coverage for next year because of uncertainties surrounding the online exchanges offering individual and small-group plans, the company said.

The Affordable Care Act 101 with SBA & Small Business Majority

As part of a robust education and outreach effort, the Small Business Administration and Small Business Majority are launching the Affordable Care Act 101 weekly webinar series. Small business owners can learn the basics of the Affordable Care Act and what it means for their company and employees, including insurance reforms, the small business health care tax credit, the new health insurance marketplaces, and employer shared responsibility provisions. Each week, SBA representatives will walk through the key pieces of the law so that small business owners can understand the facts and make the best, informed decisions they can about providing health insurance for their employees.

The Affordable Care Act 101 will take place every Thursday from now through the opening of the marketplaces in October. Below are the registration links for the next four presentations. Registration for later webinars will be available shortly.

• Thursday, July 25 at 12:00 PM ET: Click to Register
• Thursday, August 1 at 2:00 PM ET: Click to Register
• Thursday, August 8 at 2:00 PM ET: Click to Register
• Thursday, August 15 at 2:00 PM ET: Click to Register

SHOP Option Delay Resulted from Insurer Feedback

According to Employee Benefit News, the delay of the feature of the Patient Protection and Affordable Care Act intended to help small businesses was because of concerns raised by insurers, Health and Human Services Secretary Kathleen Sebelius said in response to a question at a hearing of the House Ways and Means Committee. Employees at small businesses were supposed to have a choice of health plans in a network of online insurance marketplaces, called exchanges, starting Oct. 1. Instead, their bosses will have to choose a single plan to cover their entire workforce, the administration said last month. The decision came after feedback from insurers, whom she didn’t name, and other parties. Workers will be able to choose their own plans starting in 2015, Sebelius said.

Wal-Mart Exploring Private Exchange for Small Businesses

According to the Orlando Business Journal, Wal-Mart is exploring the idea of building a private health insurance exchange tailored to offer cheaper health insurance to small businesses. Marcus Osborne, a VP for the company stated that Wal-Mart wants to work with insurers and managed care companies to find new, low-cost health insurance options tailored for small companies, which historically have limited options. Smaller employers make up a huge portion of the health insurance market in the aggregate, and it’s an underserved market.

Wal-Mart already worked with Humana to offer low-cost Medicare Part D drug coverage plans, in part because traditional health insurers zeroed in on the average Medicare patients; Wal-Mart went, again, for the underserved market that needs a less-expensive option. “The biggest problem today small employers face from a health insurance perspective is they have no alternatives,” Osborne said. “If they find anything, they’ve got to take it. There’s something wrong with that.”  A private health insurance exchange such as this may be a viable alternative to the government-run SHOP exchanges mandated in the ACA.  Until now, private exchanges such as Aon Hewitt's have been aimed at large insurers.  

Wal-Mart made headlines last fall when it announced that its employee health insurance plan would switch to using a very narrow network of providers for certain expensive procedures, and cover all expenses for the employee and a family member, including travel to these selected facilities.  Wal-Mart may be looking to build upon this experience in using these types aggressive value-based purchasing strategies in a small-business private exchange, which have the potential to keep costs low.  

Small-Business Owners Say Wellness Has Positive Financial Impact

While most small businesses don’t offer health and wellness programs to their employees, three of four that offer such programs find the initiatives positively impact their bottom line. A survey of more than 1,000 small-business owners found 75% said their wellness programs have a positive financial impact. The study, by Humana and the National Small Business Administration, showed more than half of business owners said there was not enough information available on how they should implement wellness initiatives. More than 9 in 10 (93 percent) of the study’s respondents consider their employees’ physical and mental health to be important to their financial results, but only one-third express confidence in their ability to help employees manage their well-being. A key factor in small business owners’ decision about whether or not to introduce a health and wellness program rests with employee interest.

ACA Implementation Raises Questions for Small Businesses

We know that many of NBCH's members are thinking about strategies to recruit smaller employers to their coalitions, and we are thinking about ways to expand our policy reach to be relevant to our members who are engaging in this recruitment.  This Richmond Times-Dispatch article clearly describes the decisions facing smaller employers as implementation of the Affordable Care Act moves forward.  These decisions rely on a variety of factors, including whether a state implements its own health insurance exchange or relies on the federal fallback exchange, and whether a state participates in the Medicaid expansion.  Smaller employers, as opposed to larger employers, are more keenly aware of the implications of rising health care costs and the costs to comply with the various ACA mandates.  In short, there are a lot of "moving parts," and smaller employers may be thinking about whether innovative strategies, such as private exchanges, may make sense for them.

Look for more policy guidance from NBCH regarding smaller employers in the near future.  We know they are an important part of your coalition strategies moving forward, so they are an important part of our strategy as well.

Rising Premiums and Changing Market Dynamics Spur Small Firms' Interest in Self-Insurance

The Center for Studying Health Systems Change recently published an Issue Brief discussing the growing interest among smaller employers to self-insure. Large employers have historically chosen to self-insure and assume all financial risk for their employees' health care, but small employers often found it too risky to take on that liability. Large employers have used third-party administrators (TPAs) and stop-loss insurance policies to make self-insurance a viable option. As the Brief describes, increasingly competitive markets for stop-loss insurance and TPA services are making self-insurance attractive to more employers, particularly small firms with 100 or fewer workers. Some carriers now offer stop-loss coverage to firms with as few as 10 workers.

Self-insurance arrangements may offer advantages to small businesses—such as lower costs, exemption from most state insurance regulation and greater flexibility in benefit design—that are especially attractive to large firms with enough employees to spread risk adequately to avoid the financial fallout from potentially catastrophic medical costs of some employees, according to the study.

However, if more small firms opt to self-insure, certain health reform goals, such as strengthening consumer protections and making the small-group health insurance market more viable may be undermined, according to the study. A particular concern is adverse selection—attracting sicker-than-average people—in the state-based insurance exchanges created by reform and scheduled for implementation in 2014.

Worksite wellness proves to be a cost-effective recruitment, retention tool

The key to great perks is to make them exciting and keep them on-brand. Below, you’ll find how six brands — from small startups to larger companies — reward their employees and maintain happy and efficient workers. While they aren’t all tech or digital companies, they all excel in the digital and social media space, and other startups (and large corporations) could learn a thing or two from them. Read the full article...

Witnesses Clash over Impact of Health Care Law on Small Business

Witnesses at a House subcommittee hearing offered sharply differing views of the impact of the health care law on small businesses, with a Burger King franchisee saying it will force him to turn all his workers into part-time employees and a law professor challenging claims that the overhaul will lead many businesses to drop coverage. Read the full post...