Vermont small businesses that want to extend their current health insurance plans through March 31 must notify their insurance providers by Nov. 25.
The state just informed Blue Cross Blue Shield of Vermont and MVP Health Care of this deadline, though it is not included in the commissioner of Financial Regulation’s order to allow the extension. The option to extend current coverage is one of three options the Shumlin administration is providing to businesses with 50 or fewer employees. These options are part of a contingency plan resulting from technical hang-ups plaguing the state’s new health insurance market, Vermont Health Connect.
Small businesses that want to provide coverage have two other options: buy plans directly from one of the two insurers — Blue Cross Blue Shield of Vermont and MVP Health Care — or make no decision and allow the insurer to choose a plan that most closely resembles the business’ current one. These businesses can also choose not to provide coverage and allow their employees to draw down subsidies, if they are income eligible.
Bill Little, vice president of MVP, said his company sent a letter to all of its small business subscribers telling them what plan most closely resembles their current one and how to go about extending plans or buying new ones. The company also fired off a “broker blast” to let insurance brokers know about the changes.
“They are the ones that typically do most of the transactions between the employer and the health plan,” Little said of the brokers, who he hopes can help facilitate this transition.
Andrea Cohen, director of Vermont Businesses for Social Responsibility, said she expects businesses to respond very differently to the new options. Previously, the only option on the table was to buy plans from the website, but the payment mechanism still isn’t working.
“We’ve heard from businesses (that) they will do better on the exchange, and we’ve heard that some businesses are not going to do better on the exchange,” she said. “Those latter folks will likely wait and extend their plans.”
Betsy Bishop, president of the Vermont Chamber of Commerce, is recommending to businesses that they buy Vermont Health Connect plans directly from insurers to ensure that they have coverage through the end of 2014. If businesses extend their current plans, they would be subject to new deadlines and create a risk of losing coverage.
“Our focus is to make sure that no one has a lapse in coverage for Jan. 1,” she said. “We are hoping the Vermont Health Connect system is working so that people can enroll in the way it was envisioned.”
If the site is not working by March, Cohen said, her organization does not support a further extension of current plans. She foresees legislators next session pushing to extend current plans for the duration of 2014, and she thinks it’s a bad idea.
With the option of buying plans directly from insurers, Cohen said, “there is no need” to extend plans. She said that for the market to work, it needs a large risk pool to even out costs.
“The exchange will increase transparency and level the playing field between businesses,” she said. ”That is fair and equitable for employers and employees. The exchanges offer more transparency about the cost of coverage to everyone. This has been a major failing of the status quo and needs to be cured in order to get true system reform.”