Besides keeping the lights on and staying ahead of the competition, one of the biggest challenges for small business owners today is finding affordable health coverage for their employees. But the modern healthcare market can be confusing.
What small business owners should know
Owners of small businesses can attract and retain more high-quality employees if they offer high-quality health coverage, said Michael Wolff, president at Dickerson Employee Benefits, an insurance agency based in Los Angeles for the past 50 years.
“Having access to healthcare will also decrease absenteeism,” Wolff said, “and help build morale among the employees.”
By tapping into health exchanges such as Covered California for Small Business (CCSB), employers are able to affordably offer employees a greater choice of plans, as well as hospital and physician networks, Wolff said. For instance, an employer can offer both Kaiser Permanente and any other group insurance carriers without being subject to limits on how many employees can enroll with each. This is usually not the case if you’re not using an exchange.
Are health exchanges in jeopardy?
A source of concern for many small business owners is whether a new White House administration will alter or repeal the Affordable Care Act. Bob Manzer, deputy director for Covered California for Small Business, one of the Golden State’s more successful nonprofit health insurance exchanges, said not to worry.
Coverage will remain intact through 2017 and into the foreseeable future at reputable health exchanges like Covered California for Small Business, Manzer said. Nothing will change for small business owners and current tax credits are safe. These exchanges are growing and their partners are continuously adding new products and service areas.
Why are health exchanges a good bet?
Health exchanges offer employers a broad choice of high-quality brand name insurance carriers, Manzer said. Perhaps just as important, employers no longer have to shop for a new insurance carrier each year, which saves small companies time, cost and administrative hassle, Manzer added. And if rates go up with one insurance carrier, employees can choose another insurance carrier on the exchange that offers a lower premium. No more shopping for another insurance carrier. Let competition do what it usually does which makes everyone compete for the consumer dollar.
What are the differences between nonprofit exchanges like Covered California and for-profits like Cal Choice?
They have different plans and networks, but both allow choice of plans without participation limitations, Wolff said. With nonprofit exchanges like Covered California for Small Business, it’s less expensive for the carrier to place its insurance products on the exchange, which may lead to lower costs to the employer as well. CCSB doesn’t charge late fees. For-profit exchanges like Cal Choice do. CCSB also has two full-provider PPO carriers to choose from, while Cal Choice does not.
CCSB allows employers to offer “employee-only coverage,” which then allows qualifying employee dependents to tap into the Covered California individual exchange to obtain a subsidy.
Five Tips for Small Business Owners Navigating Health Exchanges
- Check which insurance companies are offered on an exchange. Check if they offer both PPOs and HMOs and whether the PPOs and HMOs offer their full provider network or a limited network.
- Find out whether the doctors employees want to see are available on the PPO or HMO provider network.
- Check whether the exchange offers out-of-state coverage for employees.
- To find a good agent, ask friends, family or colleagues in the same industry or trade association for referrals. Also, check exchange websites. Covered California offers an online agent finder which lists an agent’s location, areas of expertise and languages spoken. All agents listed on Covered California’s site had to go through a rigorous certification process, and each is licensed by the state and holds a current “errors and omissions” insurance policy.
- Agents earn a commission from the carrier for selling a plan — ask for details. For small group business, commissions are already embedded in the rate, so the employer should understand what services they will receive from the agent. Not all agents have the same services and capabilities.
—Daniel Vasquez for Covered California for Small Business