Insurance initiative aids only one small business

A program meant to help small businesses provide subsidized health insurance coverage to low-income employees has cost more than $1 million so far and helped just one business.

Part of the state's Arkansas Works Medicaid program, the small-business initiative provides about $200 a month to subsidize the coverage for one employee of Shire Post Mint, a Springdale company that makes collectible coins associated with the Game of Thrones television show and other fantasy entertainment franchises.

Peggy Maringer, the company's co-owner, said she decided to start offering coverage to her employees after watching one of them wait for months for word on whether his application for Medicaid coverage would be approved.

Threats by Republicans to repeal the 2010 Patient Protection and Affordable Care Act were also a worry.

"I was just so concerned about coverage evaporating for everybody, I just wanted to get something in place," she said.

The initiative is one of several changes to the state's expanded Medicaid program that went into effect Jan. 1 and were intended to encourage enrollees to stay employed and take responsibility for their health care. An employee would have to qualify for Medicaid in order to take part. The initiative is separate from the health insurance exchange for small businesses.

Gov. Asa Hutchinson had wanted the small-business initiative to cover up to 75 percent of the cost of job-based insurance for employees whose low incomes qualify them for Arkansas Works.

In a waiver authorizing the program, then-U.S. Department of Health and Human Services Secretary Sylvia Burwell last year approved the assistance, but only for businesses, such as Shire Post Mint, that did not offer coverage in 2016.

Other businesses can also enroll, but they would receive assistance only to cover the employee's portion of the premium, not the employer's portion.

To be eligible, businesses must have 50 or fewer employees and cover at least 25 percent of employees' premiums.

In a special session set to begin Monday, lawmakers are expected to consider authorizing additional changes to Arkansas Works.

One change would limit eligibility to people with incomes of up to the poverty level, instead of 138 percent of the poverty level, starting in 2018.

Under this year's poverty guidelines, the change would lower the annual income cutoff for an individual from $16,643 to $12,060. The threshold for a family of four would be lowered from $33,948 to $24,600.

If the change is approved by the Legislature and President Donald Trump's administration, Arkansas Works would stop reimbursing businesses for the premiums of employees with incomes above the poverty level after Dec. 31, Department of Human Services spokesman Brandi Hinkle said.

A draft of the proposed legislation supported by the governor also calls on the Human Services Department and other agencies to make recommendations by Oct. 1 on other ways the state can help small businesses provide coverage.

Contract canceled

In light of the low enrollment in the small-business initiative, the Human Services Department has canceled a contract with the Arkansas Health Insurance Marketplace to administer the program.

Created by the state Legislature in 2013, the marketplace runs the state's health insurance exchange for small businesses and approves the plans offered on its exchange for individual consumers.

In a March 2 letter to the marketplace's interim director, Angela Lowther, Human Services Department Director Cindy Gillespie said the "inflexibility" of federal officials and restrictions in the waiver left the Arkansas Works small-business initiative "unable to support the administrative costs required for its operation."

She said the department would focus on "developing reforms to Arkansas Works, rather than enrolling more employers into this current program."

She asked Lowther to "reduce costs and expenditures for this program to the greatest extent possible" before the contract termination took effect April 3.

"For example, please cease all marketing and outreach efforts and IT enhancements for this program immediately," Gillespie wrote.

She said the department will work with the Trump administration "to develop a replacement" program to help small businesses.

The contract had called for the Human Services Department to pay the Arkansas Health Insurance Marketplace up to $2.9 million from Oct. 1, 2016, to July 7 to administer the program.

The department has paid the marketplace about $1.1 million so far and is "negotiating a final payment," Hinkle said in an email. She said the federal government is expected to cover most of the cost under a program providing enhanced federal funding for enrollment system upgrades.

She said the Human Services Department is now handling enrollment for the program.

Irving, Texas-based Health Management Systems has taken over issuing the premium assistance to Shire Post, and any other employers who sign up for Arkansas Works.

Hinkle said those duties were added to the company's contract to administer the state's Health Insurance Premium Payment Program, which helps employees who qualify for the traditional Medicaid program pay the premiums for job-based coverage.

The traditional Medicaid program covers primarily poor people who are elderly or disabled, children from low-income families and parents with incomes of up to 17 percent of the poverty level.

The Health Insurance Premium Payment Program provides assistance to about 500 people working for 322 employers, Hinkle said.

The company receives an administrative fee of $25 per month for each covered employee, she said. In the fiscal year that ended on June 30, 2016, the payments totaled $95,350.

Assistance lacking

Maringer said she found information about Arkansas Works after going to the federal healthcare.gov website and finding a link to the website for the state marketplace.

The marketplace's small-business exchange provides an Internet portal that allows businesses to compare plans. Under the federal Small Business Health Options Program, businesses that have fewer than 25 employees, pay average annual wages of less than $50,000 and enroll in exchange plans can qualify for tax credits to offset some of their premium expenses.

Maringer said she didn't know about the tax credit but did find information on Arkansas Works.

Looking for help, she called several insurance agents listed on the state marketplace site.

Some didn't return her calls. Others declined to take her case.

"Most of them said it was so difficult to navigate the Arkansas SHOP program, let alone Arkansas Works, that they didn't do it anymore, even though they had taken the training," Maringer said.

Eventually, she "stumbled through" on her own and enrolled using the marketplace website.

"It was really involved," she said.

Arkansas Works hasn't provided as much assistance as she had hoped.

The $200 subsidy covers only about a fourth of the cost of family coverage for the one employee who qualifies.

Five other employees are enrolled in the plan but didn't qualify for the assistance, she said.

"Frankly I was afraid it was going to put us under the first quarter of the year, since the reimbursements were not there that I had planned on being there," she said.

She said she might end up shopping around for a less-expensive plan but hasn't given up on offering coverage to her employees.

"We may not be making much profit this year doing it this way, but at least we all know we have that health insurance," she said.

SundayMonday on 04/30/2017

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