Companies have run into many of the same challenges encountered by individuals on health insurance exchange.
Minnesota’s new health insurance exchange isn’t getting off the mark with small businesses any faster than it is with consumers.
As of last week, only 115 Minnesota small businesses had used the MNsure website to buy medical coverage for their workers, far below expectations. Companies have faced many of the same problems besetting individuals — a glitchy sign-up process and interminable waits to reach the MNsure call center.
“I can’t tell you how frustrating it has been,” said Kathy Doyle, office manager for Forest Mushrooms in St. Joseph, Minn.
One of the major goals of insurance exchanges throughout the country was to help mom-and-pop shops find more affordable coverage. The idea was that a bigger risk pool would hold down costs.
But just 475 Minnesota workers are covered on small business plans purchased through MNsure, according to the latest figures. The state had hoped to enroll nearly 9,000 employees by March 31 and 13,000 by year’s end.
Neil Rolland, who directs MNsure’s small business exchange, acknowledged that small firms have been hampered by “system limitations.” But he said more businesses are getting through now.
Doyle said she wrestled with the MNsure site for more than two months before squaring things away for her brother’s 10-employee company.
“We paid for insurance in January; the check’s been cashed,” she said. But the company had no insurance cards until last week, and “no way to prove to anybody we have insurance.”
One employee had to pay $200 in out-of-pocket costs for a prescription. In another case, Doyle sent a worker with a high-risk pregnancy to the doctor with a letter that verified insurance and sought a delay in billing until MNsure could sort things out.
Some small business owners are giving up in frustration. Dan Freier owns a health care market research firm, Deft Research, and tried to set up a defined contribution option so his 10 employees could go to the MNsure exchange and shop for themselves.
Freier successfully created a MNsure account, painstakingly filled out forms with his employees’ names and Social Security numbers and thought he was “set to go.”
But then the site quit working, and MNsure told him to reapply by mail.
“I just said, ‘Screw it.’ Life’s too short,” Freier said. “We gave it a game try, and moved into buying the old-fashioned way” using a broker.
“In hindsight, I should have given up earlier and waited until next year, when all the kinks were worked out,” he said.
The issues with MNsure’s small business site are hardly unique. Many of the 15 exchanges run by states and the District of Columbia have been slow out of the gate. California didn’t get its business exchange launched until Dec. 2, and exchanges in Idaho, Maryland, Mississippi and Oregon still aren’t open for small businesses.
The federal site, HealthCare.gov, delayed online enrollment for small businesses for a year, and only accepts paper applications for now.
The Affordable Care Act established the SHOP exchanges, which stands for Small Business Health Options Program, for firms with fewer than 50 full-time employees. By 2017, employers of any size will be allowed to use the SHOP exchanges.
Tax credits of up to half of the premium cost are available for the smallest of companies — those with less than 25 workers and an average annual wage of less than $50,000. The business discounts, just as with individuals, are available only through the exchange.
University of Minnesota professor and health economist Roger Feldman said that while current low enrollment on the MNsure SHOP exchange is tied to technical hitches, he doesn’t see much of a future for it.
While firms with 50-plus workers will face penalties under the health law in 2015 if they don’t offer insurance, small businesses are free of mandates. And businesses may be reluctant to rely on premium tax credits, fearing that they’ll go away down the road, he said.
“The history of these efforts to offer subsidies to employers are never successful,” Feldman said. “I don’t think the small group exchanges are ever going to take off. Period.”
About a third of Minnesota’s small businesses with fewer than 50 employees offer insurance to workers, according to federal figures. Despite the slow start attracting small businesses, MNsure supporters underscore that the long-term goal is to get more people insured.
At a recent board of directors meeting, MNsure officials heralded the latest enrollment figures, which showed that nearly 85 percent of the companies using MNsure to buy coverage have 10 employees or less — the size of an organization that likely couldn’t afford insurance before the Affordable Care Act, they noted.
Right now, about 10 percent of businesses that have created accounts on MNsure have followed through and purchased a plan. But because employers can buy coverage all year long, MNsure SHOP director Rolland said he isn’t overly concerned with the lack of follow-through in the first year.
Doyle said Forest Mushrooms, which sells mushrooms to grocery stores and restaurants, faced a 14 percent increase if it stayed with its current plan. But buying through the exchange allowed the family owned business to tap into more than $7,000 in premium tax credits.
The struggle was worth it in the end, Doyle said, because she found an equivalent plan on MNsure that will cost quite a bit less.
“The process was a nightmare,” she said. “But I’m pretty pleased with the choices that were there.”
Jackie Crosby • 612-673-7335