[T]he state Senate unanimously passed a bill last week that would keep Vermont’s largest businesses from beginning to buy employee health insurance on the state’s online exchange as planned.
S.214 would change a previous statute that would have allowed businesses with more than 100 workers to buy commercial insurance through a future Vermont Health Connect small business portal or directly from insurance companies starting in 2018.
It came in response to a report facilitated by the Green Mountain Care Board that determined that large companies with unhealthy and thus costly workforces would be the ones most likely to find a better deal on the exchange, driving up prices for everyone.
“It appears highly likely that allowing large employers to enter (Vermont Health Connect) will produce higher premiums on average in the large group market,” the report said. “It also appears that more Vermonters, including small group employees and individual policyholders, would be negatively impacted than positively impacted in all scenarios tested.”
The report said employers with healthy populations that are paying cheaper rates than those on Vermont Health Connect would have “little to no financial reason to participate in the exchange, unless required,” and therefore “the groups who will enter the exchange will likely be disproportionately unhealthy,” leading to higher insurance rates.
If S.214 becomes law, large employers will need to continue either self-insuring their employees’ health care or using brokers to buy commercial insurance plans.
Sen. Tim Ashe, D/P-Chittenden, the chair of the Senate Finance Committee, sponsored S.214. “There seemed to be very little good reason to keep the current law the way it is,” Ashe said in an interview. He said the bill is “saving a lot of people a lot of money.”
As of Jan. 1, businesses with 100 or fewer workers are required to purchase commercial health insurance directly through Blue Cross Blue Shield of Vermont or MVP Health Care of New York. The small business exchange doesn’t exist, and small businesses have been buying Vermont Health Connect insurance policies directly through insurers since 2014.
The Legislature already passed a law this year to allow the Shumlin administration to seek a waiver through the U.S. Centers for Medicare and Medicaid Services to avoid having to set up the SHOP exchange for those small businesses.
