As of October 17, 2014 small businesses (50 or fewer employees) now have a broader choice of small group insurance plans through the Washington State Health Benefit Exchange (HBE) Small Business Health Options Program (SHOP) at HealthPlanFinder Business. Prior to October, HBE plans were only available in a couple counties, this year one carrier is providing plans statewide.
Regrettably the HBE has chosen to push its plans even where those plans may not be the best solution for a small business or its workforce. The fact that they are using public funds to market this approach has raised concerns within the small business community including organizations like the Association of Washington Business.
Small employers are urged to check with other insurance carriers, trade associations, or brokers before making a final decision on insurance coverage. Even though federal health care reform, the Affordable Care Act (ACA), eliminated a number of options for small businesses, there are all kinds of exciting traditional and new plans outside the HBE.
Chris Free, owner of Rapport Benefits Group Incorporated, and former Chair of the Washington Association of Health Underwriters, describes some of these options:
“The SHOP Exchange will be an exciting option for smaller employers who are able to meet the tax credit eligibility requirements, and your broker can help you determine eligibility. Unfortunately, the window for tax credit eligibility is very small and few employers qualify for a subsidy once all of the math has been done.
“More important to most employers is how broad the market outside of the SHOP Exchange will be. Many Americans mistakenly believe that the only place to buy insurance will be through Exchanges, but the options outside the SHOP outnumber the SHOP by leaps and bounds.
“All of Washington State’s insurance carriers have come out with new products available outside of the SHOP Exchange. There are new rating models and new plan designs that meet the ACA requirements. Insurance carriers have also worked to use more innovative networks and other technical changes to deliver the most affordable ACA-compliant programs they can. Competition in this market is alive-and-well and benefiting consumers who look hard enough – or have good brokers.
“One major change in the products available to businesses in Washington State is the shift in the Association Health Plan market. Due to the ACA, many associations and insurance trusts have had to close their programs. In their place, dozens of new associations and trusts have sprung up – many of which are running with such low administrative costs that they only work with qualified brokers. If an employer qualifies, many of these programs deliver health plans that are more competitive than the SHOP exchange.
“The next option employers should explore when evaluating employee health benefits is the ability to self-insure. Don’t let that term scare you, it’s not unlimited liability. Self-insurance comes in many forms, often with very strict limits on the liability imposed on employers.
“The benefits of self-insurance can make a huge difference for employers. The first major difference is that many of the ACA’s rules do not apply or apply differently, giving employers more flexibility and often cost savings. In addition, the whole goal of self-insuring is to reap the financial benefits of healthy employees and wellness activities. Self-funding opportunities are available to almost all employers; with programs open to groups with as few as just five employees. It will not work for everyone, but you need to look.
“There are many ways to combine traditional insurance plans with self-funded programs for employers who find efficiency in creative designs. Self-funding does not work for everyone, but risk retention almost always works. The use of §105 plans in conjunction with traditional insurance plans allows employers to purchase less insurance, capture savings from healthy employees and wellness activities, and offer more flexible benefits to employees. While these programs are easy to use for employees, navigating the legal complexities in their creation can take the use of a professional.
“In the past some employers have sought to cover their employees by reimbursing their costs to purchase individual insurance. Unfortunately, the ACA and recent regulations have put a stop to this. While we’re hopeful that this regulatory issue will get cleared up, this practice is inadvisable and should be changed as soon as possible – small businesses have until June 30th, 2015. Of course, for large employers, this option was hardly viable post-ACA due to the fact that individual insurance would not protect employers from penalties.
“They key to accessing all of these avenues, including the SHOP, is a good broker. One of the best ways to find a good broker is through a word-of-mouth referral from other business owners you know. If that doesn’t work, contact the Washington Association of Health Underwriters (www.WAHU-Online.org) and let them know you’re looking for someone who can help. A third place you may look is at the HBE SHOP Exchange itself. When you visit the Exchange’s website, there is a link for Customer Support in the upper right corner of every page. Near the bottom of the Customer Support menu is the option to ‘Find a Broker.’ Remember, it costs you no more to use a broker.”
Whether you contact a broker, trade association, or insurance companies, check other options before you use the HBE. Until such time as the HBE makes some changes and provides employers more information, this advice is particularly important.
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