Small businesses throughout Washington — those with 50 or fewer employees — can now shop for and enroll in health insurance plans through the state’s insurance exchange.
The exchange got off to a slow start for businesses this year when only one insurance provider, Kaiser Health Plan of the Northwest, agreed to sell plans in the marketplace and only in Clark and Cowlitz counties. For coverage beginning January 2015, small employers statewide can shop the exchange for coverage from Moda Health, and Kaiser will continue selling in the two southern counties. A total of 23 different plans are available from the two insurance companies.
Some businesses using the exchange, called Washington Healthplanfinder Business, will be eligible for federal tax breaks, depending on the number of employees and their salaries.
“Washington Healthplanfinder Business is a historical new option for small employers in Washington state,” said Catherine Bailey, director of the business exchange, in a press release. “Small businesses will also be able to enjoy the administrative ease that the marketplace provides.”
Bailey noted that it’s easy to compare plans on the website, manage employer contributions and allow employees some flexibility in choosing which plan they want.
Twelve employers in Clark or Cowlitz counties currently are enrolled in coverage through Healthplanfinder Business, a marketplace created under the Affordable Care Act.
Small employers are not required to provide health insurance, but most Americans need coverage or face a penalty. People typically have insurance coverage from an employer, a government program such as Medicare or Medicaid, or they can buy it themselves on the individual market. Open enrollment for the individual market begins Nov. 15. Businesses can purchase health insurance throughout the year.
It’s difficult to predict how many businesses will use the small business exchange. Bailey said a conservative goal would be 100 employers, but perhaps even 1,000 will enroll.
“We’re hoping some of the small businesses who aren’t offering coverage will take a look,” said Bailey earlier this fall.
There are numerous insurance options available to small businesses and non-profit groups in Washington.
For employers shopping the state’s exchange, the ACA includes a tax benefit covering up to half the cost of the insurance premiums. It applies to employers that paid at least half the cost of their workers’ premiums, and employed fewer than 25 people making on average $50,000 a year. Because Washington’s exchange only included two counties, the tax benefits for 2014 were extended to small businesses outside of the exchange as well.
Small businesses also can purchase plans through brokers and directly from insurance companies on what’s called the small group market.
But the most popular alternative historically has been insurance bought from associations or trusts, which act as middlemen between employers and insurance companies. More than 500,000 residents have insurance coverage through an association.
The associations serve specific sectors such as builders, technology workers or restaurants, by selling insurance to member businesses in those fields. Associations generally offered better prices but could hike rates for companies with less healthy workers. New federal regulations changed the rules for associations, and the Office of the Insurance Commissioner (OIC) has been reviewing the groups to determine who is in compliance.
On Wednesday, the OIC announced that it had issued its first approval to UnitedHealthcare of Washington’s 2014 plan for Associated General Contractors of Washington. There are more than 60 associations still in review.
“Associations offer a lot of benefits to their members, and to their communities,” Insurance Commissioner Mike Kreidler said in a release. “We’ve worked very hard to reach out to as many associations and insurers as possible for the last several years to help them understand the new federal law.”
In Washington, there are roughly 340,000 registered small businesses with fewer than 50 workers, according to the state’s Department of Revenue.
Nationwide roughly 40 percent of small businesses offer health insurance to their workers, according to the National Federation of Independent Business.