Businesses don’t flock to state exchange

The New York State of Health marketplace for small business health plans is so far an unpopular option.

Of the nearly 600,000 people who enrolled in health plans through the state”™s exchange as of March 10, only 5,000 signed up through the Small Business Marketplace.

Both small employers and individuals have until March 31 to sign up for 2014 coverage through the exchange. However, many employers say the exchange”™s plans haven”™t been the right fit, said James Schutzer, an insurance broker with J.D. Moschitto & Associates Inc. in White Plains.

“People find them unattractive,” Schutzer said. “If you use it, it”™s likely because you have a tax credit. But that only applies to a few businesses.”

Nearly every employer”™s health plan has been modified to comply with the Affordable Care Act, increasing renewal rates for some. But even when employers have been dissatisfied with rates, they haven”™t found a solution on the exchange.

One of Schutzer”™s clients, Mitchell Taube, an Elmsford business owner, looked into the exchange when he saw an increase in his rates with Oxford Health Plans, but its network of available doctors was inadequate for his 30 employees, Taube said.

Only two plans are available on the exchange for Westchester businesses and the coverage network is primarily limited to New York and New Jersey, Schutzer said. Employees who live in Connecticut, for example, wouldn”™t have access to care within their state.

Taube said he was happy to see several of his employees were eligible for subsidies on the individual marketplace, but chose not to use the Small Business Marketplace for group coverage.

The plans available on the Small Business Marketplace are the same if directly purchased from an insurance provider, said Schutzer, president-elect of the New York State Association of Health Underwriters. However, the exchange does offer a new option, which allows employers to select a set amount to contribute toward employees”™ coverage and then allows employees to select a plan that fits their needs.

Tax credits are available for employers that have up to 25 employees and pay an average annual wage of less than $50,000. Businesses with 50 to 99 employees must provide employee group coverage by 2016 or face federal penalties. Businesses with 100 or more workers must provide coverage by 2015.

Taube”™s company, Digiscribe International L.L.C., was not eligible for a tax credit. Still, Taube said he felt it was important to offer employees health care. After working with Schutzer, Taube settled on a plan outside of the state exchange with Aetna Inc., which offered a comparable network to Oxford but at a better price, he said.

It was a stressful four weeks of gathering information, analyzing alternatives and informing employees about their new health care plans. But in the end, Taube said he was in favor of the ACA and the changes that have come with it.

“I think it had a positive impact on my company,” he said. “It forced us to sit down with our employees and make sure they all had coverage. A lot of people complain about it but I thought it was a good exercise for us. If I have healthy employees, they”™re more productive for us. If I have a sick employee, who”™s not going to the doctor, that doesn”™t help me or my company.”

Schutzer said most of his small business clients with existing health care plans have seen “a downgrade” in their plans at renewal in the form of higher employee co-pays or deductibles as insurers comply with requirements of the Affordable Care Act. Some businesses are searching for better deals with other insurance carriers.

Schutzer said he has his doubts about whether the state exchange will ever mean lower rates for small employers. While the individual marketplace and mandated individual coverage might level the risk pool and lower costs, the same doesn”™t appear to be true for small business health plans.

“I obviously don”™t have a crystal ball here and can”™t give you a 100 percent right prediction, but I don”™t think that cost will come down,” Schutzer said. “I hope that the increase won”™t be as big as what we”™ve seen in the last couple years but (the exchange) doesn”™t have enough of an impact where it”™s going to drive health insurance premiums down or health care costs down. It”™s the health care costs that drive the premiums and that not what”™s being fully addressed here.”

By the numbers, as of March 10

• 908,595 completed New York State of Health applications
• 590,639 enrolled in New York State of Health plans
• 5,000 enrolled in Small Business Marketplace
• March 31 deadline for 2014 coverage