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Updated: October 17, 2019

Access Health seeks to reinvent lagging small-biz insurance exchange

Photo | CT Mirror DSS has hired over 100 new staff members to help with Medicaid unwinding. The agency is also ramping up the number of contracted staff to support its shared operations with Access Health CT, including call centers and data entry.

Connecticut’s health insurance exchange has by many measures been a success, enrolling approximately 110,000 individuals last year, which is nearly half of the individual market in the state.

However, Access Health Connecticut (AHCT) has had a much harder time gaining traction with its separate small business exchange.

The Small Business Health Options Program, or SHOP, had fewer than 400 small businesses, with 1,382 total covered lives, enrolled as of earlier this year, amounting to less than 1 percent of Connecticut’s small business health insurance market.

That’s according to a new report commissioned by Access Health that details the reasons for that “lethargic” performance and makes the case that SHOP, which along with the individual exchange was created by the Affordable Care Act (ACA), could grow its customer ranks to 1,000 small businesses, with 5,000 total covered lives.

However, getting there will require some new strategic thinking, according to the report by Trumbull-based BJM Solutions.

SHOP must iron out competitive tensions that linger with some insurance carriers and brokers by: recasting itself as a mutual partner, shifting its marketing approach and honing its target business audience. The SHOP exchange also needs additional funding and staff resources, BJM said.

Access Health’s board of directors is expected to discuss the report’s findings at its meeting Thursday.

In a recent interview, John Carbone, a longtime Access Health manager who took over management of SHOP several months ago, reacted positively to the report’s recommended course of action.

Carbone, who essentially runs SHOP by himself, said he is already taking one of the recommendations to heart.

He’s in the midst of vetting and hiring additional staff, which would bring his SHOP team up to as many as six employees in the near future.

Those hires will include client relationship managers, who would spend much of their time on the road, presenting SHOP offerings to brokers who are responsible for a large chunk of exchange business, as well as to small employers.

“It’s about making sure we have adequate staff to be reliable,” Carbone said. 

The hiring comes as SHOP prepares its annual year-end solicitation for carriers and brokers.

Growth plan

BJM, which is headed by economist Fred McKinney, recommends that SHOP hone its focus on small Connecticut companies that don’t currently offer health insurance to their workers.

There are an estimated 12,000 or more uninsured businesses in the state that would be a good fit for SHOP, BJM said.

One key characteristic that makes an employer a good fit for SHOP is if it pays an average salary lower than $50,000, as ACA tax credits for small businesses exclude higher-paying employers. 

Those firms could range from landscapers and manufacturers to companies with white-collar office environments, Carbone said.

It’s not that SHOP hasn’t already been targeting uninsured businesses, but BJM said the small business exchange must heighten that focus, and not waste its efforts trying to win over small employers that are already enrolled in off-exchange plans.

Luring off-exchange employers to SHOP can cause friction with insurance carriers and brokers, and on top of that, it provides no financial benefit to SHOP, since the exchange is funded by a flat assessment on all insurers offering small group coverage, regardless of whether their plans are on the SHOP exchange or not.

“AHCT’s revenue only grows when previously uninsured individuals or employers get added to the pool of insured Connecticut residents,” BJM said.

SHOP currently offers plans from two carriers, Anthem and ConnectiCare.

“Collaboration, not competition, is what is needed to reduce the number of uninsured Connecticut residents,” BJM said.

Carbone characterized that advice as more of a “stay-in-your-lane” approach.

Access Health CT
John Carbone, who took over leadership of Access Health's SHOP exchange a few months ago, is enthused by a new game plan for the small business exchange, presented by a hired consultant.


Also important, BJM wrote, is that SHOP build relationships with sole proprietors in the state.

While they aren’t yet eligible for SHOP because they don’t have employees, many will likely grow and hire, which means they could become customers in the not-too-distant future.

There are 263,000 one-man and one-woman shops in Connecticut, BJM estimated.

Lack of incentives a hindrance

With its meager enrollment, SHOP is barely a player in the “small group” portion of Connecticut’s health insurance landscape.

One state-hired expert once predicted, back in 2012, that SHOP could exceed 40,000 lives by 2016. 

So why is SHOP enrollment so small and virtually flat today?

BJM said much of it boils down to insufficient incentives -- for employers, brokers and insurance carriers alike.

Many small employers view the federal tax incentives they can receive on the SHOP exchange as ultimately not worth it, since they only last for two years, and exclude firms that pay average salaries exceeding $50,000 a year.

As SHOP seeks to ramp up its messaging, BJM warns not to make the tax credits a central focus, since they haven’t been a big draw thus far.

McKinney, who separately holds a faculty position at Quinnipiac University’s business school, interviewed some brokers who said they view Access Health as a competitor that raises their costs and takes away business.

“These stakeholders appear to view [Access Health] as a nuisance that must be tolerated because it is the law rather than as a strategic partner that enhances their business operations by increasing the percentage of Connecticut businesses with health insurance,” BJM’s report said.

Others simply don’t see a reason to recommend SHOP to clients over off-exchange offerings. Poor customer service has also been a problem, the report said.

These aren’t entirely new revelations. Brokers have complained over the years about technical glitches and other hurdles in their dealings with Access Health, with some concluding it’s a better idea to steer clients to off-exchange plans.

BJM concluded that more carriers aren’t participating in SHOP due to a perception that their expected return on investment won’t justify the costs of participating, related to IT, marketing and human resources, for example.

In addition, insurers are increasingly offering competing alternative insurance products to small companies. BJM said those alternative plans are pulling customers out of the fully insured market, and noted that the plans aren’t required to pay the insurance assessments that fund Access Health’s operations.

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