Ready or not, small businesses face the Affordable Care Act

Amid the confusion and controversy surrounding the rollout of health insurance exchanges, one thing remains clear: For small businesses, navigating the process is not the simple, one-stop shopping experience that some predicted it would be.

While the website problems are likely to be smoothed out eventually, changes in how health insurance is regulated and sold suggest that businesses still will need assistance in navigating their health insurance options.

Under the Small Business Health Options Program (SHOP), small businesses can offer several different plan options to their employees through the exchanges, including a "defined contribution" approach that gives employees a set amount of money with which to purchase insurance.

Tax credits are available for businesses that have fewer than 25 employees and the average salary of those employees is under $50,000. The federal delay of the SHOP program will not apply to Minnesota or other states with a state-based exchange. So for small businesses in Minnesota, the new world of health care insurance has arrived.

Under MNsure, a company can offer employees plans from multiple carriers. So a small-business owner may have some employees with insurance company A's plan, and others with company B or C. Having choices is great — but it adds complexity to the process.

More choices of insurance carriers may not deliver significantly better options. Both in and outside the exchanges, a number of insurance companies offer many options for enrollees to choose from. The "private exchange" model represents a pre-emptive effort by the insurance industry to compete with some of the main features of the government-sponsored exchanges. If all of a company's health insurance needs can be met by a single carrier, it may be more efficient to buy from that one source, rather than deal with multiple insurance companies.

Options, options, options

The private market still gives employers the most options; a number of insurers are not participating fully in the ACA exchanges. In Minnesota, Bloomington-based HealthPartners is not offering small-business plans on MNsure for 2014 (though it does offer individual plans). Nationally, some insurance companies such as UnitedHealth Group are, for the most part, not yet offering plans on the exchanges. This "wait-and-see" approach may be the best strategy for some businesses purchasing health plans as well.

When deciding between insurance exchanges and the private market, companies should be aware of the trend toward narrower provider networks. Consumers value choice when it comes to accessing care, but the health care industry, spurred by ACA regulations, is moving toward more restricted provider networks.

Additionally, MNsure only offers health insurance, and does not provide access to the ancillary benefits — life, dental, vision, long-term care and disability insurance — that many employers have in their benefits program. Employers wishing to include these will need to purchase them on the open market.

Regarding brokers' fees, they are usually built into insurance premiums. The cost of working with a broker will, in most cases, be the same whether a company purchases insurance on or off the exchanges.

With all the complexity and uncertainty that health reform brings to the table, small businesses will continue seeing these reforms as a mixed blessing. On the one hand, being able to offer insurance to employees or direct them to an option like the individual exchange is an opportunity many employers have sought for years: the ability to better compete with larger companies on employee benefits.

On the other, the long-term costs, the complexity of adopting new systems and the breadth and depth of changes to the systems that employers previously knew are all daunting to business owners.

What's not changing is that health insurance is complicated. Whether it be a broker, an attorney or some other adviser who understands insurance, employers should seek out a trusted source of expertise when evaluating their options.

Websites can help make price comparisons, but they are less able to explain risk/benefit tradeoffs, long-term strategies, and issues such as compliance and tax implications.

The need for experienced advice has never been greater, both for businesses already offering insurance and those considering it.

At a time when this basic employee benefit has never seemed more unsettled, the voice of experience can offer real value to Minnesota companies.

About the author: David Ackerman of the Marsh & McLennan Agency is a MNsure-certified insurance agent who helps small employers procure benefit programs. His e-mail is ackermand@rjfagencies.com.