State insurance exchange will push ahead with varied plan options for business
Connecticut is moving forward with its goal to offer multiple health plans within its small business insurance exchange this fall, despite a recent federal ruling that is allowing states to delay the move for a year.
The U.S. Department of Health and Human Services recently released guidelines that said it would not enforce a 2010 Affordable Care Act requirement that states offer multiple health plans in their Small Business Health Options Program — known as SHOP exchanges — by Jan. 1, 2014.
Instead, the deadline is being pushed back one year, giving states breathing room by allowing them to set up exchanges that could include just one health plan option for employers. The decision is raising concerns from the small business community around the country, who say the lack of offerings will limit competition and their ability to find affordable coverage.
That won't be an issue in Connecticut, although small business owners here are raising red flags around affordability and other issues.
Connecticut's SHOP exchange is scheduled to include five different insurance carriers — UnitedHealthcare, Anthem, Aetna, Connecticare and HealthyCT — that will offer 20 different plan choices, officials say.
“In Connecticut, we made the decision to offer the full menu of options right away,” said Jason Madrak, the chief marketing officer of Access Health CT, which is running the statewide exchange. “We got started on our exchange much earlier than other states so we are going to continue to move along the path to offer a true options exchange.”
Insurance exchanges are a key part of the federal health care reform law and will essentially serve as online marketplaces where insurance can be purchased. The federal government will also offer subsidies through the exchange to certain qualifying individuals and small businesses to make health care coverage more affordable.
Madrak said HHS's recent offer to delay implementation did give Access Health CT officials pause and made them consider offering a simplified, less robust exchange in year one, which begins Jan. 1, 2014. Setting up the exchange is complex and states are being forced to meet aggressive deadlines, which is why HHS is providing more time.
It wasn't until last week that Access Health CT inked a deal with a vendor to develop its SHOP Exchange, and there is still a lot of work to be done to get it ready by the October open enrollment season, Madrak said.
Still, Connecticut is outpacing the progress of many other states and wants to establish the most competitive insurance exchange marketplace as early as possible, Madrak said.
“This provides the most value for business owners in the state,” Madrak said.
Connecticut small business leaders say they are happy the exchange will offer competing plans, but it doesn't quell many of their concerns about the affordability of coverage.
Many small business advocates say they worry that insurance plans offered in the exchange won't be affordable, even with federal subsidies, because of the robust benefits they are mandated to offer.
The business community is also raising questions about the lack of education and communication being provided by exchange officials, saying many small businesses remain completely unaware of the health insurance changes coming their way this fall.
“There is so much anger, frustration and lack of knowledge within the small business community around health care reform,” said Kevin Galvin, the chairman of Small Business For A Healthy Connecticut. “My concern is that they are not doing anything to fill that void to try to build some positive energy around what is coming.”
Galvin, who is also a member of several exchange advisory boards, said he recently conducted an unscientific poll outside a local home improvement store in which zero out of 40 small business owners and individuals he interviewed said they knew what the insurance exchange was. He did the same poll about three weeks ago, with similar results.
Galvin said the general public's lack of knowledge about the exchange will threaten its ability to provide insurance to the uninsured and underinsured.
“There is no information going out to the business community,” Galvin said.
Andrew Markowski, Connecticut director of the National Federation of Independent Business, agrees the business community has a lot more questions than answers about the exchange. However, he said he understands developing the online marketplace is still a new and evolving process that relies on federal guidelines that have been slow to come out.
The big question everyone wants answered, Markowski said, is pricing, but that answer won't come for another month or two when insurers begin to file their health plans with the Connecticut Insurance Department.
“Anecdotally, small businesses would like to see more information,” Markowski said. “But we also have to recognize this is the first of its kind in Connecticut. I give them some credit because they are moving as fast as they can.”
Madrak said he understands the concerns of the business community but it is difficult to start a major public relations and education campaign right now when they still don't know what the products will look like or cost.
He said the Access Health CT is planning a major PR push toward the end of summer and early fall right before open enrollment season so that employers are armed with information when it's time for them to make tough choices on their health benefit plans.
“The risk is to start the public relations campaign too early,” Madrak said. “If we went out hard now and got everybody up to speed and let the whole summer go by, people tend to forget some things. We want to make sure we push that campaign closer to the time when businesses are actually going to be using the information we will be giving them. Timing is really critical.”
While product pricing isn't known, other key information about Connecticut's exchange is starting to emerge.
Although they will share the same point of entry online, individuals and small business owners will actually be directed to separate exchange experiences.
Deloitte Consulting has been building Connecticut's individual exchange from the ground up, while New York's HealthPass, and its technology partner bswift, were recently hired to supply the SHOP Exchange. HealthPass will also provide call center services to small businesses, while Maximus is supplying call center services for individual exchange members.
Employers with 50 or fewer workers will have to make the choice to offer insurance through the SHOP exchange or send their employees into the individual market, a decision that will be aided by pricing tools available on the exchange web site. Small employers should also leverage brokers for advice when making these tough, important decisions, said David Lynch, the call center manager at Access Health CT.
If employers choose to offer coverage, the SHOP exchange will feature five carriers that each offer four tiers of coverage including bronze, silver, gold and platinum health plans. Bronze plans will offer the least generous coverage, while platinum plans will be the most generous. Health plans offered within the exchange must offer certain essential health benefits like prescription drug coverage and emergency and mental health services, which are mandated under the Affordable Care Act.
The exchange will also help determine employers' eligibility for new tax credits.
If employers know they want to offer a bronze plan, the exchange will allow them to compare prices across all five carriers. Or an employer can pick a single carrier and shop up and down the different tiered plans that insurer is offering. Besides price comparisons, the SHOP exchange will aggregate premium payments across all carriers and send a single bill to each employer. Broker commissions will also be aggregated so insurance agents receive only one check.
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