Presentation by Terry Gardiner

Small Business Majority

National Academy for State Health Policy

February 16, 2011

Exchanges – Attracting Small

Businesses

• Public policy advocacy organization – founded and run by small business owners

• National – based in Bay Area – with offices in Sacramento, Washington, DC and New York

• Research and advocacy on issues of top importance to small businesses (<100 employees) and the self-employed

• Very focused on healthcare over the past 3 years – top issue in all of our research

About Small Business Majority About Small Business Majority

SBM Exchange Model BillSBM Exchange Model Bill

• Built on foundation of NAIC Model Bill

• We conducted focus groups, listening tours and webinars to get small business owner feedback about exchanges

• We are active participants with other business and policy groups working on exchange designs

• Policy choices and additions based on our research that serve small businesses

SBM Model Bill: Lessons Learned

Utah Exchange 2010 80 Employers

Massachusetts Connector

2009 4,200 Employers

HealthPass, NY 1999 4,000 Employers

CBIA, CT 1995 6,000 Employers

PacAdvantage, CA 1993-2006 10,000 Employers

COSE, OH 1983 11,000 Employers

Federal Employees (FEHBP)

1960 8 Million People

We studied and interviewed representatives from exchanges to understand the successes, failures and lessons learned

• Only half of employers belong to a business group

• Trusted Advisors – their brokers, accountants, peers

• Communication – business press, business groups, trade groups

• Navigators need to be trusted messengers

Effective Outreach & EducationEffective Outreach & Education

• Purchase health coverage through the exchange

• Purchase health coverage in the outside market

• Maintain a “grandfathered” health plan

• Do not offer health coverage

Employer Health Coverage ChoicesEmployer Health Coverage Choices

Will the exchange offer “value” – lower price;

better coverage; better services?

• An independent exchange will create the greatest trust and support

• “Active purchaser” model can provide value for employers and employees

• “Employee choice” model is needed to differentiate from outside market and drive consumer choice and value

Trust, Value and Choice Trust, Value and Choice

Meeting the Needs of EmployersMeeting the Needs of Employers• 5.9 million employers with fewer than 100

employees employ 43 M nationallyo 80% (4.8 M) have fewer than 10 employeeso 54% (2.6 M) of employers with fewer than 10 employees

do not offer health coverage

• Most small businesses are very small and lack sophisticated HR departmentso Average employer in

Connecticut exchange has 8 employees

• All necessary information for employer and employees to make decisions on coverage

• One application

• One premium payment & detailed accounting

• One source for enrollment changes

Single Point of Entry for EmployersSingle Point of Entry for Employers

• Qualification and calculation of the small business tax credit; state programs

• Coverage of out-of-state employees

• Coordinating coverage of Medicare-eligible employees

• Provides additional “HR” services such as Cobra administration, Section 125 service, HSA/FSA/HRA

Full Array of ServicesFull Array of Services

• Recognize different role of brokers for individual and small group markets

• Brokers will have ongoing role with small business selling other products

• Initial launch and reception has proven critical for both employers and brokers

• Balancing broker compensation and services with competitive cost to employers will be challenging

• Successful models train and support brokers on ongoing basis

Brokers Working for Exchanges not Against

Brokers Working for Exchanges not Against

• Defined contribution option – NY, Utah & Montana

• Contributions by multiple employers for part-time workers – Utah

Other Measures to Attract BusinessOther Measures to Attract Business

• “Free choice” voucher

• Support of larger businesses

Frequently asked questions:http://smallbusinessmajority.org/hc-reform-faq

Small business healthcare reform summary:http://smallbusinessmajority.org/_docs/resources/

SBM_whats_in_it_for_small_biz.pdf

Small Business Resources Small Business Resources

For more information:

Terry GardinerNational Policy Director Email: tgardiner@smallbusinessmajority.org