🔒Round 2 for the ACA Health insurance options still a challenge for small businesses

As the federal health insurance marketplace in Maine enters its second year of enrollment for individuals and businesses, many small businesses are still on the fence about whether the Affordable Care Act will help or hinder Maine's small group health insurance market.

That's the impression Dr. Wendy Wolf came away with after moderating three ACA small business forums this fall — in Lewiston, Portland and Bangor — which were sponsored by several chambers of commerce, the U.S. Small Business Administration, the National Federation of Independent Businesses, Bangor Savings Bank, the Maine Association of Nonprofits and Mainebiz. Wolf is president and CEO of the Augusta-based Maine Health Access Foundation, whose mission is to promote access to affordable, high-quality care, particularly for those who are uninsured.

She also runs a nonprofit, so she's not immune to the challenges of providing affordable health insurance to employees.

“Of all the groups affected by the Affordable Care Act, small business owners are the ones who are struggling the most,” she says. “The ACA is one of the largest tax reform laws passed in recent history. It has a lot of implications for businesses. For a small business owner looking at the changing landscape of health care and all that's going on with the ACA, it's an incredibly confusing time.”

Open enrollment for 2015 began Nov. 15 and will run through Feb. 15. That is putting health insurance decisions back on the front burner for businesses and individuals considering their options in Maine's federally run marketplace. In its first year, Maine's marketplace had more than 44,000 individuals sign up for coverage during the six-month enrollment period that ended on March 31 — double the federal government's 22,000 first-year enrollment goal for the state and roughly 36% of the 135,000 Maine residents who were uninsured before Maine's federally run marketplace opened.

Maine's early enrollment numbers for 2015 weren't available in early December, but the regional office of the federal Department of Health and Human Services reports that, nationally, 765,135 people enrolled during the first two weeks of the ACA's second-year enrollment period, with 49% being new consumers.

Options for small businesses

Wolf says the ACA forums were tailored to small businesses, a group largely overlooked in the marketplace's first year, when the Obama administration delayed until 2016 the “pay or play” provisions for companies with 50 to 99 full-time-equivalent employees (defined under the ACA as working 30 hours or more a week, averaged over a month) to give them more time to prepare for the mandates. Businesses with fewer than 50 FTEs, the vast majority of employers in Maine, aren't required to offer health insurance.

The ACA has created new opportunities for small businesses, she says, especially those that fall under the 50-FTE threshold. For example, a Maine employer with fewer than 25 FTEs can qualify for a small business tax credit of up to 50% (up to 35% for nonprofit employers) to help offset the cost of insurance purchased through SHOP, a new federal program available online for Maine businesses with up to 50 FTEs (starting in 2016, it will be expanded to include employers with up to 100 FTEs).

To qualify, employers must pay average annual wages of less than $50,800 and must contribute at least 50% to its employees' health plan. Employers can deduct premium costs not covered by the tax credit on their taxes, but only for plans purchased through SHOP.

Mitchell Stein, an independent health policy consultant who participated in the small business forums moderated by Wolf this fall, says the ACA also removes a hindrance that many small businesses faced when their company plans didn't meet their insurers' minimum participation requirements. Now, he says, those employers can sign up for a SHOP health plans during the open enrollment period.

On the other hand, with only one plan being available through SHOP this year — more options won't be available until the 2016 enrollment period — Stein says he's not seeing a lot of interest from Maine companies. “The only thing driving people to the SHOP website is the availability of the tax credits if they're less than 25 full-time employees,” he says.

Stein and Wolf say smaller companies that aren't required to offer health insurance under the ACA — but were already offering it because they felt it was the right thing to do for their workers, or had wanted to do so but always felt they couldn't afford it — have a new option, thanks to the ACA.

“Let's say I'm the owner of a hypothetical company of 25, I've reviewed all the information my broker has provided me and I realize, 'Wow, I don't see how I can keep offering insurance,'” Wolf says. “I could choose not to offer insurance and encourage my employees to use the marketplace. I could tell my people that I'm going to give them a raise instead, or give them money to help them purchase a plan on their own. I could tell them, 'You might even get a better deal on the marketplace,' where, depending on family income, they might qualify for financial help that will lower their premiums and out-of-pocket costs.”

One caveat in that scenario: The employer can't use pre-tax dollars to help employees buy insurance on the marketplace. Even so, Wolf notes that 90% of Maine's individual enrollees qualified for tax credits to offset the costs of their monthly premiums and reduce their out-of-pocket costs in the marketplace's first year — making it an option worth exploring for many smaller companies.

Other pluses that she sees in the ACA include no-cost preventive care and the cap on out-of-pocket expenses in any single plan year, so long as they're incurred through in-network providers and services ($6,350 for individuals, $12,700 for families).

Navigating the marketplace

Wolf also acknowledges the ACA has introduced new provisions allowing insurers to calculate plan rates using each employee's age, gender and smoking status — a change that's likely to benefit companies with a young workforce of non-smokers, but might cause premiums to escalate for companies with older employees. Likewise, its goal of improving quality and controlling health care costs, while laudable, might encourage insurers to craft narrow network health plans — which is what Anthem did last year in southern Maine. Wolf says small businesses and their covered employees should be mindful, then, that unexpected charges can appear on bills for any care or service performed by out-of-network providers under some marketplace policies.

“I'm a doctor, I work in this sector day in and day out — and yet, when I have to look at these questions in terms of my business, these are hard decisions,” she says. “Some of them are going to be uncomfortable decisions. Most people don't have the time, or the expertise, to think through all of the complexities that are involved.”

Wolf encourages small businesses to seek help from trusted employee benefit advisers, including insurance brokers and tax consultants.

Step 2, she says, is making sure the insurance broker is certified to provide information about the ACA marketplace. If the company's broker isn't certified, she says, it's OK to get their advice, but get a second opinion from a marketplace-certified broker. It's not a given that a non-certified broker will be completely knowledgeable about the ACA's regulations and requirements for small businesses, she says.

Wolf also says it's important for owners and CEOs to ask brokers to provide information on every plan that's available to their business.

“Your broker is not under any obligation to show everything that's out there,” she says, explaining that the advantage of seeing all options is that it will help when the owner or CEO sits down with employees. “As a small business CEO myself, I want my employees to see all that's out there. It helps when we talk about the difficulty of the decision to arrive at a reasonable health insurance plan at a premium that's affordable,” she says.

The ACA requires marketplaces to establish a Navigator program to help consumers understand their coverage options and find the most affordable coverage that meets their health care needs. In Maine, that outreach is being done by Western Maine Community Action and the Fishing Partnership Health Plan, a Massachusetts organization that's partnering with the Maine Lobstermen's Association to help fishermen obtain insurance.

David Cousens, a Thomaston fisherman who's president of the Maine Lobstermen's Association, says he got affordable health insurance through Maine's ACA marketplace with the help of navigator April Gilmore McNutt. “My costs went down,” he says. “I have three sons [ages 31, 28 and 21] who are lobstermen and didn't have their own insurance. I told them, 'Your business is at risk if you don't have health insurance.' I was really adamant. I really didn't take 'No' for an answer. Now my three sons have health insurance and it's affordable.”

Out of the association's 1,200 members, Cousens says it was largely the older fishermen who signed up for health insurance through the marketplace last year. He expects more of the younger fishermen will sign up during the current enrollment period — largely, he says, because they've heard word-of-mouth stories about insured fishermen who got the care they needed through their insurance at affordable out-of-pocket prices.

“Lobstermen are notoriously underinsured,” he says. “They're skeptical about everything. Change is always difficult, but I think more will do it this year because they're hearing the success stories that are out there.”

Read more

Another thing about Maine: It doesn't shut down after Labor Day

Lewiston insurer continues rapid growth

Maine ACA enrollment nears 75,000

Lewiston insurer gets lion's share of ACA signups

Maine Health Access Foundation appoints new head