The Shumlin administration announced good news Monday: 75 percent of small businesses are enrolled in new health plans that take effect in 2014. That leaves just 9,300 employees who will have to switch from old plans to new ones partway through the year because the payment piece of Vermont Health Connect is not working.
Three-quarters of small businesses, covering 29,200 employees, signed up through carriers, which allowed them to bypass the nonfunctioning payment system. Another 15 percent, representing 5,800 Vermonters, voluntarily elected to extend their current coverage through March 31. These percentages, provided by the Shumlin administration, were calculated relative to the number of small businesses providing insurance to their employees in 2013.
By touting the number of businesses that have signed up for 2014 plans, the administration is inadvertently advertising something else — the high rate of attrition from the Vermont Health Connect website.
The majority of businesses have set up plans for next year because they steered clear of the Vermont Health Connect website — an option Gov. Peter Shumlin provided to them for most of November. The 9 percent of businesses that stuck with the exchange — declining the backdoor option of signing up with a carrier — now have to make a mid-year switch.
But while small businesses ditched the website, the vast majority chose to continue providing insurance to their employees.
According to the Department of Vermont Health Access (DVHA), only 2 percent of businesses that currently provide insurance to their employees, covering roughly 800 Vermonters, opted not to offer insurance through the exchange.
As of Tuesday, 11,630 Vermonters had selected a plan through Vermont Health Connect. The payment system is partially functional for individuals who are asked to pay for plans by mailing a check to DVHA.
Calls for one-year delay
On Dec. 2, DVHA Commissioner Mark Larson announced that ongoing problems with payment system would prevent the small businesses that were planning to sign up directly through the website from paying for their plans in time for coverage to begin in January. To avoid a lapse in coverage, the administration allowed them to extend their 2013 plans until March 31, at which point they will switch over to 2014 plans.
That doesn’t necessarily cause problems — some small businesses chose that route voluntarily after all — but it does complicate things for employees who had been planning to switch carriers. For those people, deductibles and out-of-pocket costs will reset on March 31.
That announcement arrived one week after the deadline had passed for businesses to sign up directly with carriers.
The administration’s decision — and its timing — risked defection among the very groups that had stayed with the Vermont Health connect website the longest.
After the announcement, the Vermont Chamber of Commerce and the Vermont League of Cities and Towns joined calls for a one-year delay of the requirement that small businesses enroll in the exchange.
The push for a 12-month reprieve from the state mandate has been a predominantly Republican initiative — spearheaded by Darcie Johnston, who runs the anti-single payer group, Vermonters for Health Care Freedom, which was later supported by Republican lawmakers Rep. Don Turner and Sen. Joe Benning and Lt. Gov. Phil Scott.
Hours after the announcement, Steve Jeffrey, executive director of the Vermont League of Cities and Towns (VLCT), told Vermont Public Radio, “I’m afraid that it is been so mishandled at this point that we would be better off if we just went until Jan. 1, 2015.”
Later Jeffrey retracted his call for a delay, but his original statement suggests that if problems persist, the backing for a one-year delay could quickly transcend political boundaries.
Jeffrey’s support for the one-year extension stemmed from practical concerns. About 40 percent of towns had signed up for insurance through the Vermont Health Connect website, and many municipal employees are on high-deductible plans. If those employees were to switch to a new plan with a new carrier in April, their deductibles would reset at that point — meaning expenses they incurred during the first three months of the year wouldn’t count towards their new deductible. And by that time it would be too late for them to sign up directly with carriers.
After a meeting with the administration on Dec. 3, and subsequent conversations with carriers, Jeffrey arranged for both the League and municipalities to sign up directly with insurance companies, even though the deadline for that option had passed.
“What we were really looking for was to reopen the option that was allowed after the first round of screwups to allow employers to go directly to the providers to be able to arrange for a whole year’s worth of coverage,” Jeffrey said. Once that option was open, he withdrew his support for a one-year delay.
Jeffrey credits the carriers with keeping the health care transition on track for VLCT members. “They really are bending over backwards to make it all happen.”
Jeffrey said he’s only heard of one town that opted not to offer its employees health insurance through the exchange — the town of Bridport, which, he pointed out, only has two or three full-time employees on its payroll.
Betsy Bishop, executive director of the Vermont Chamber of Commerce, also called for a delay following the Dec. 2 announcement. Bishop opposed the mandate when it was being debated in the Legislature, but after it passed she and other Chamber employees have been serving as navigators, helping businesses to comply with the requirement. She could not be reached for comment.
Clarification: The percentages of small businesses cited in this story were calculated by the Department of Vermont Health Access based on the pool of small businesses currently offering plans to their employees. The original story did not make this clear, and it was updated at 10:40 A.M. on Dec. 11, 2013.
