How to succeed in health insurance for your small business without really trying — well, maybe without trying too hard
By Melissa Landon
Kentucky Health News
The new Patient Protection and Affordable Health Care Act brings changes not only for individuals seeking health care but also for small business owners. Many tips for small business owners to successfully navigate the new system were offered by panelists Tuesday at a panel discussion, “Navigating the Affordable Healthcare Act: Making it work for your small business” sponsored by Business Lexington.
The broad goals of the reform law were to increase health-care quality, make it affordable for everyone and require everyone to have it. The idea is that if the pool expands enough—to include young people who may not have bought coverage but are now required to do so—premiums would go down. Also, people now cannot be denied coverage because of pre-existing conditions, and income is the deciding factor for cost—not age. On the other hand, smokers can be charged more.
Another change is that all insurance plans must include 10 essential health benefits: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental-health and substance-use disorder services (including behavioral-health treatment), prescription drugs, rehabilitative/habilitative services and devices, laboratory services, preventive and wellness serivces/chronic disease management and pediatric services—including oral and vision care, according to the federal website, HealthCare.gov.
How should you determine if you are required to offer health coverage for your employees? If a company has more than 100 full-time employees, it must offer health coverage to the employees or face a monetary penalty. “Equivalent” means that part-time employees count, too; for example, two part-time employees equal a full-time employee. In order to offer employees a group plan, 70 percent of of those who can’t get insurance elsewhere (Medicaid, for example) must participate, and 50 percent of all employees—including those who can get coverage elsewhere—must participate. (Other examples of getting insurance elsewhere are through a spouse, being 26 or younger and remaining on a parent’s plan.) For example, if a small business employed 60 people, and 18 qualified for Medicaid, the business could still offer a group plan if all the other employees participated. However, if 36 of the 60 wanted to enroll in Medicaid, the business could not offer a group plan because it would not meet the participation requirement of 50 percent of all employees.
Kentuckians are eligible for Medicaid if their annual income is 138 percent or less of the federal poverty threshold each year. It’s important for a business to find out if employees qualify. Some small businesses do not have very sophisticated human-resources functions, so may find it more challenging to gather this information. Meeting with employees to discuss these issues is very important, the panelists stressed. Panelist Gary Ramsey, chief marketing officer at Bluegrass Family Health, advised talking with employees with both a concern for their well-being and also the success of the company in mind.
Once you have learned the specifics from your employees, you can decide how to proceed. You can send the information in a spreadsheet to your insurance agent (whom you should make sure is up-to-date with how the state health-insurance exchange works). Employers can offer a particular plan or let the employees choose from the plans on the exchange; keep in mind that the employer also qualifies for coverage. Make sure your employees understand what the coverage includes and what doctors they can see under each plan. Visits to doctors outside a network may not be covered, or be more expensive. “The bottom line is, you have to educate your employees,” said panelist Betsy Johnson, an attorney with Stites & Harbison. All the panelists encouraged those learning about health plans to think about new options different from what was done in the past.
Plans for small businesses are procured through a special section of the exchange, which is increasingly called a “marketplace” for insurance. The Kentucky marketplace is branded Kynect, and its segment for small businesses is the Small Business Health Options Program (SHOP). Businesses with 25 or fewer employees can receive federal subsidies for coverage, much like those given to individuals. Trained representatives called “Kynectors” are available to help businesses and individuals navigate the system.
Though the system is complicated, and is subject to change, the panelists urged business owners to act now in educating themselves about the health marketplace, informing their employees and proceeding in a manner most beneficial to their businesses and their workers.