How do the revised rules in the Bipartisan Budget Act of 2015 affect you and your business?
As of March 31, 199 small businesses had enrolled in what is known as the Small Business Marketplace, up from 99 at the start of the year. Several thousand are eligible to participate in the program.
The exchange has been adding about 30 businesses per month since it opened in October, said Jim Sugden, the exchange’s director, adding that he hopes to increase the monthly enrollment number by a “significant multiple” by the end of the year. Sugden declined to give a precise enrollment goal.
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Although the number of businesses enrolled is still only a small percentage of those that are eligible, Sugden considers enrollment to be a partial success so far.
“I’m pleased with that progress,” he said. “We would have liked to see faster enrollment, but with a system this large, you have to expect quirks and kinks.”
The Small Business Marketplace has been slow to catch on, in part, because businesses – roughly 70 percent – opted to renew their existing plans, an option made possible by the federal government.
Many companies were faced with potential premium increases of 20 percent to 60 percent if they chose an Affordable Care Act-compliant plan, so they decided to renew their existing plans early, in 2013, to give themselves more time to figure out how to deal with the changes set in motion by the federal legislation.
Emphasis has been placed on the individual exchange up to this point, because it had a March 31 deadline for open enrollment, absent a “qualifying event,” such as a job change, marriage, death, or birth or adoption of a child. Any one of these allows enrollment in the exchange outside of the open-enrollment period.
But small businesses can enroll all year, Sugden said, so now some of the focus that Connect for Health Colorado has placed on the individual market can be shifted to the small-business market.
The largest effort, Sugden said, will be increased training to brokers, who have assisted in enrolling about 70 percent of the businesses signed up so far. Brokers also can shift their focus from the individual exchange to the small business, he said.
John Arensmeyer, chief executive of the Small Business Majority, a small-business advocate that is supportive of the Affordable Care Act, also stressed the importance of insurance brokers in getting businesses signed up for the exchange.
“Small businesses trust brokers,” Arensmeyer said. “That’s how they’ve always gotten their insurance. Brokers are essential.”
Nationally, it is expected that once the federal small-business exchange opens in the fall of 2015, companies that already were providing insurance to employees will be the most active in buying insurance from the exchange, Arensmeyer said.
That trend has been demonstrated in Colorado, said Sugden, who estimates that about 80 percent of the businesses that have signed up with the Small Business Marketplace previously offered coverage.
One of the draws to the small-business exchange in Colorado and other states is the potential for a tax credit, which can be attained by businesses that have 25 or fewer full-time equivalent employees who make an average of $50,000 each. The employer must pay at least 50 percent of the employees’ premium cost. The tax credit is then worth up to 50 percent of the employer’s contribution.
Early estimates suggest that as many as 70 percent of businesses nationwide could be eligible for the tax credit, but the data proving that in Colorado have yet to come in, according to Sugden. But no matter the eventual success of the tax credit, the Small Business Majority wishes it would have gone further.
“We would have liked to see tax credits be more robust,” Arensmeyer said.
The Small Business Marketplace is also likely to benefit from the name recognition of Connect for Health Colorado supplied by the first six months of operation in the individual market.
“Brand recognition and reputation are critical for ongoing success,´ said Vincent Ashton, president and CEO of HealthPass New York, a private health exchange that has been successful in New York for 15 years.
“An exchange must be more than a website,” he said.
Connect for Health Colorado has expanded beyond its web boundaries by establishing enrollment outposts in locations varying from rural grocery stores to downtown Denver. That physical presence helped boost individual market success, ultimately pushing the individual exchange’s enrollment past 100,000 by the March 31 deadline, but small-business owners rely on brokers and in-office assistance, rather than retail locations.
While the end of individual open enrollment may mean a boost for the Small Business Marketplace, growth in the market is not likely to skyrocket in the next few months, according to Kevin Lucia, senior research fellow at the Center on Health Insurance Reforms at the Georgetown University Health Policy Institute.
“Building that book of business will take time,” Lucia said.