your bottom line: what health reform means for wisconsin small businesses jessica stone small...
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Your Bottom Line: What Health Reform Means
For Wisconsin Small Businesses
Jessica StoneSmall Business Majority
About Small Business MajorityAbout Small Business Majority
• Public policy advocacy organization – founded and run by small business owners
• National – based in California – 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 5 years – top issue in all of our research
Small businesses struggling with costsSmall businesses struggling with costs
Soaring cost of health insurance – especially for small businesses – 54% of businesses <10 employees don’t offer (Kaiser study)
28% self-employed: not covered
Small firms pay 18% more than large businesses
Our national study: Small business health costs will more than double over the next 10 years – $2.4 trillion total
Our national study: Small business health costs will more than double over the next 10 years – $2.4 trillion total
Small businesses struggling with costsSmall businesses struggling with costs
Our opinion surveys: 86% of small businesses don’t offer because of cost; 72% of those who do offer say they are struggling to do so
Our opinion surveys: 86% of small businesses don’t offer because of cost; 72% of those who do offer say they are struggling to do so
The new federal lawThe new federal law
• Builds on and seeks to fix our existing healthcare system
• Aims to rein in healthcare costs; reduces deficit by over $100B by 2020; by $1.3T by 2030 (according to the Congressional Budget Office)
• Implementation is primarily the responsibility of the states – essential to have small business input
• Important immediate benefits – other key provisions to be implemented over the next 4 years
Immediate Consumer Protections Immediate Consumer Protections
• Bans health plans from dropping insurance coverage when an individual gets sick (Sept. 23, 2010)
• Insurers will no longer be able to deny coverage for patients with pre-existing conditions (2010 for kids, 2014 for adults)
• Ban on lifetime caps that rescind coverage when people get sick (Sept. 23, 2010)
• Adult children under 26 can stay on their parents’ plan (Sept. 23, 2010)
• First-dollar coverage for preventative care for all new plans (Sept. 23, 2010)
3 Key provisions of health reform for small businesses3 Key provisions of health reform for small businesses
• Provides immediate tax credits for most small businesses ($40 billion in credits by 2019)
• Provides immediate access to a Preexisting Condition Insurance Plan for the self-employed
• Establishes a competitive marketplace for small businesses and the self-employed
I. Small business tax creditsI. Small business tax credits
Our report: 86,100 Wisconsin small businesses are eligible (86.8% of all businesses); 25,800 businesses eligible for the maximum credit
Our report: 86,100 Wisconsin small businesses are eligible (86.8% of all businesses); 25,800 businesses eligible for the maximum credit
II. Preexisting Condition Insurance Plan (formerly high-risk pools)
II. Preexisting Condition Insurance Plan (formerly high-risk pools)
• Available to individuals -- incl. self-employed
• Takes effect immediately
• Eligibility: Individuals who have been uninsured for six months and have been denied coverage for a preexisting condition or have a letter from a physician stating they have a preexisting condition.
• Plans = lower premiums due to federal funding ($5 billion over 5 years)
• Available until full implementation in 2014 (no gap in coverage)
PCIP in WisconsinPCIP in Wisconsin
• Run by the state Health Insurance Risk-Sharing Plan (HIRSP)
• www.hirsp.org
Other immediate changesOther immediate changes
• Grants to study small employer wellness programs
• $9M granted in 2011
• Reduce the risk of chronic disease among employees and their families through evidence-based workplace health interventions and promising practices.
• Promote sustainable and replicable workplace health activities.
• Promote peer-to-peer healthy business mentoring.
• Medical Loss Ratio or the “80/20 rule” (2011) and Rate Review
• Increased access to care - community health centers (2011)
III. State Health Insurance Exchanges: Coming in 2014III. State Health Insurance Exchanges: Coming in 2014
• Large marketplace to shop for health coverageo Purchasing pool to increase buying power and reduce
administrative costs
o Small businesses with fewer than 100 workers eligible
• Private insurance plans will competeo Improved competition will increase employer choice
o Exchange will negotiate with insurers on behalf of small businesses to ensure higher quality and lower costs
• RAND Studyo Exchanges will expand coverage to 85.9% of small
business employees, up from 60.4% today, an increase of 10.5 million workers
State Health Insurance ExchangeState Health Insurance Exchange
• One-stop shop web portal
Small Business Exchange
INSURANCE PLANS
EXCHANGEChoice
ComparisonBilling
Tax Credits
SMALL BUSINESSES
o Compare plans and get detailed information about price, quality and service
o Plans organized by category: bronze, silver, gold, platinum
o Calculator to compare costs across plan options
o Streamlined billing process
State Insurance Exchange: Other BenefitsState Insurance Exchange: Other Benefits
• Many small business workers and self-employed entrepreneurs will receive affordability tax credits towards their premiums
o Up to 400% of federal poverty level (approx. $90,000 for a family of four)
• Incentives for administrative efficiency and modernization
• Expanded coverage and individual responsibility requirement – reduce hidden tax
State insurance exchangeState insurance exchange
• States determine whether to keep the individual and small group markets separate or merge them
• Insurance will still be sold outside exchange
• Members of Congress must use the exchange
CO-OP Plans: More choiceCO-OP Plans: More choice
• $3.8B invested in new CO-OP health plans
• Plans must operate with a strong consumer focus, profits must be used to further its mission through lower premiums, improved benefits, or improved quality of care
• A team of small business, community and health insurance professionals with an 11-member board formed the Common Ground Healthcare Cooperative in the Milwaukee, Wisconsin region.
• HHS awarded the new WI CO-OP a $56.4 million loan.
• http://www.commongroundhealthcare.org/
What does this all mean for your bottom line?What does this all mean for your bottom line?
Changes in average employer contribution per person covered
Exchange – key issuesExchange – key issues
• Active vs. passive (can the exchange negotiate?)
• Regional exchanges
• Role of brokers
• Expanding exchange to large firms in 2017
• Incorporation of wellness and prevention programs
• Administrative/design issues: billing, payment, web, etc.
• Effective education and outreach
• Businesses with fewer than 50 workers – 96% of all businesses – are exempt from any requirement to offer insurance
Shared responsibilityShared responsibility
ResourcesResources
• National HHS website: www.healthcare.gov
• Our website: www.smallbusinessmajority.org
o “What’s in Healthcare Reform for Small Businesses”
oDetailed FAQ
o Tax credit calculator
Join Our NetworkJoin Our Network
• Erica Dowell, Network Coordinator
• Email: [email protected]
• Direct: (202) 535-3244
Connect with us!
@SmlBizMajority
Small Business Majority
Ways to Get Involved:
Contact
• Receive a monthly newsletter
• Share your story for media requests
• Letters to the editor/Op-eds
• State events/Roundtables
• Fly-ins
• Webinars for business organizations