The Minnesota Chamber of Commerce is pressing state government to sharpen its pitch to allow small businesses to obtain tax credits when buying coverage outside the MNsure health insurance exchange.
In May, the Legislature directed the state Department of Human Services (DHS) to seek a waiver from the federal government to rules that currently limit subsidies to small businesses that purchase health plans through government-run exchanges.
The federal Affordable Care Act makes tax credits available to certain small employers, but the chamber argues that only a small fraction of Minnesota firms currently buy through MNsure.
The one-page draft waiver released last month by DHS “falls short” because it doesn’t explain how the request satisfies certain standards in the law, and omits key arguments, said Bentley Graves, the chamber’s director of health care policy.
“We were disappointed in the lack of specifics of the draft request,” wrote Douglas Loon, the chamber’s president, in a Jan. 26 letter to Human Services Commissioner Emily Johnson Piper. “In particular, we are puzzled as to why the underlying rationale and supporting arguments for the requested flexibility were not included in the draft request.”
In a statement Friday, DHS said it’s taking the chamber’s comments into consideration as it finalizes the waiver request.
“We are still in the 30-day comment period, which runs until Feb. 15,” DHS said.
Minnesota launched the MNsure exchange in 2013 to serve three distinct segments of the state’s health insurance market: people who qualify for public health insurance; individuals who purchase coverage outside of groups; and small businesses.
There’s been concern for years about the small business market. Small businesses are much less likely to offer coverage than large employers, and small firms question whether big businesses get better deals from insurers.
To improve the market for firms with 50 or fewer employees, the federal health law created the Small Business Health Options Program — called SHOP, for short — that’s a part of new government-run exchanges like MNsure.
Tax credits through the exchanges are available to small employers with up to 25 workers with an average annual wage of $50,000 or less. Qualifying employers must cover at least half the cost of employee coverage.
“Despite the fact that as many as 23,000 businesses in Minnesota have fewer than 25 employees and offer health insurance for their employees, roughly 260 businesses have enrolled in SHOP — a fraction of the number originally projected,” Loon wrote. “Many small businesses have found it difficult and frustrating to navigate the SHOP exchange.”
Shane Delaney, a MNsure spokesman, said the exchange in September launched a more automated SHOP enrollment process. Currently, about 1,871 people are covered through small business accounts at MNsure — an increase from 1,405 people in May.
The exchange also is doing more to publicize the small business program, said Richard Lett, a health insurance agent with LeClair Group in Woodbury.
Lett’s company is one of four lead agencies certified by MNsure to work with small businesses, and help them buy coverage through the exchange. Lett called the MNsure system “a very good, solid platform,” and said agents haven’t had trouble using it.
“We don’t lead with SHOP in any way, we offer all options and carriers to our clients,” Lett said. “However, I think SHOP is often a great option for the right business.”
Enrollment in SHOP exchanges has lagged across the country. One problem has been a lack of participation in the new marketplaces by health insurance companies.
Last year, Minnetonka-based Medica announced it was dropping out of the small business portion of MNsure, leaving just Eagan-based Blue Cross and Blue Shield of Minnesota.