Exchanges – AttractingSmall Businesses

Presentation by Terry GardinerSmall Business Majority

Alliance for Health ReformOctober 22, 2010

Small Business LandscapeSmall Business Landscape

• 5.9 million employers with fewer than 100 employees nationally employ 43 M

o 80% (4.8 M) have fewer than 10 employees

o 54% (2.6 M) of employers with fewer than 10 employees do not offer health coverage

• Most small businesses are very small and lack sophisticated HR departments

o Average employer in Connecticut exchange has 8 employees

Employer Health Coverage Choices

• Purchase health coverage through the exchange

• Purchase health coverage in the outside market

• Maintain a “grandfathered” health plan

• Do not offer health coverage

Will the exchange offer “value” – lower price; better coverage; better

services?

Effective Outreach & Education

• Only half of employers belong to a business groupo IRS postcard succeeded in making small business aware of the

tax credit

• Trusted voices of peers – historical sources:o brokers, business groups, business media

• Navigators in ACA can work for businesso Massachusetts Fishing Partnership Health Plan lowered

uninsured rates from 43% to 13%

• Focus groups & other direct contact in process to ensure needs of small employers are met

Single Point of Entry for EmployersSingle Point of Entry for Employers

• All necessary information for employer and employees to make decisions on coverage

• One application • One premium payment & detailed accounting• One source for enrollment changes• Qualification and calculation of the small business

tax credit; state programs• Coverage of out of state employees• Coordinating coverage of Medicare-eligible

employees• provide additional “HR” services such as Cobra

administration, Section 125 service, HSA/FSA/HRA

Role of Insurance Brokers

• Recognize different role of brokers (agents) for individual and small group markets

• Brokers will have ongoing role with small business selling other products

• Initial launch and reception has proven critical for both employers and brokers

• Studied balance of broker compensation and services

• Model – Washington Health Insurance Partnershipo http://www.hip.hca.wa.gov/

Other Measures to Attract Business

• Defined benefits option – Utah & Montana

• Contributions by multiple employers – Utah

• “free choice” voucher

• Support of larger businesses

Health Reform Info for Small Businesses

• Frequently asked questions:o http://smallbusinessmajority.org/hc-reform-faq/index.php

• Small business healthcare reform summary:o http://smallbusinessmajority.org/_docs/resources/

SBM_whats_in_it_for_small_biz.pdf

• For more information:o (866) 597-7431 or Info@smallbusinessmajority.org