Toby Talbot / AP Photo Gov. Peter Shumlin addresses a forum for small business owners looking at the launch of the Vermont Health Connect insurance exchange Wednesday in Montpelier. Many Vermont employers are struggling with the decision whether to continue their workers on health insurance or allow them to buy it individually and take advantage of federal tax credits.
MONTPELIER — Some small businesses in the state are weighing whether to continue providing health insurance to employees next year or have them enter a new health care marketplace as individuals and receive federal tax credits to help make it affordable.
State officials and the Vermont Chamber of Commerce sponsored a forum Wednesday in Montpelier to help small businesses with less than 50 employees navigate the state’s new health care exchange, known as Vermont Health Connect.
The new online marketplace for health insurance is part of the federal Affordable Care Act enacted in 2010. Signups for Vermont’s exchange start Oct. 1 and take effect Jan. 1.
“Countdown to Coverage” forums will take place in every Vermont county.
But as officials look to provide information and guidance to small employers, many are facing difficult questions about what, if any coverage, they will continue to provide to employees.
Diann Percy of Dale Percy Excavation in Stowe said her company has already determined that it will drop employer-sponsored coverage when the exchange launches. About 25 of her 45 employees work only part of the year and providing employer-sponsored coverage for them through the exchange will be more expensive to those employees than purchasing insurance through the exchange as individuals.
“After going into the subsidy calculator and looking at families and individuals, we just determined that it would be better for most employees,” Percy said.
“It was going to cost them less for their insurance if they went into the individual market,” she said. “They’re getting subsidies in the plan that aren’t going to be available to them if we offer coverage.”
Dropping coverage, however, will hurt the 20 full-time employees who currently have employer-sponsored coverage. Those employees likely make too much money to receive federal subsidies available to lower-income individuals and families through the exchange, Percy said, making health insurance more expensive for them next year.
The federal law requires employers to provide insurance coverage to all eligible employees if the employer offers a plan that is listed on the exchange.
Percy said her company will look into raising pay for employees because it is dropping employer-sponsored health coverage. However, doing so could cost the workers more in income taxes and property taxes, she said.
So far, she said the exchange has not been a benefit to her company.
“If their families could get subsidized in the (employer-sponsored plan) it would be fine. It would be a neutral thing. But right now, I’m looking at it and I don’t think it’s a good thing,” she said.
Others have yet to determine what they will do, including Jim Fecteau, owner of Fecteau Homes in Montpelier.
“We’re at the beginning of seeing how it’s going to affect us and what we’re going to do,” he said. “We waited a bit because we’ve been hearing that it’s confusing.”
Fecteau said he planned to sit down with one of the 250 “navigators” across the state that are available to explain the exchange and the process for enrolling.
“This looks good, in general, but each case is specific,” he said.
Gov. Peter Shumlin, who addressed the three dozen or so business owners attending the forum Wednesday, touted the exchange but acknowledged that it is “new and can be confusing.”
“We’re on to a whole new era with Vermont Health Connect and I believe that it’s going to be a good thing for Vermont,” he said.
The governor promised the exchange will be ready for enrollment Oct. 1, when it begins offering health plans through either MVP or Blue Cross Blue Shield effective Jan. 1.
“People are worried about whether or not we’ll be ready,” Shumlin said. “I can assure we will be ready. We’re on track for you to shop for insurance starting on Oct. 1.”
Still, Robin Lunge, director of health care reform for the Agency of Administration, said the state is working to ensure a contingency plan is in place if the exchange doesn’t launch as expected. She was peppered with questions Wednesday from small business owners on the enrollment process.
“We are working with the carriers and others on backup plans. But, we are on track for Oct. 1,” Lunge said. “We’re definitely working on contingencies, so no worries there.”
Lunge told employers that beginning Oct. 1 they can visit the exchange’s online portal and begin enrolling in a health care plan for employees. They will be able to compare available plans and coverage and choose how much they want to contribute toward employees’ coverage.
Once a plan is chosen, employees themselves will have a period of time to select coverage from the plans selected by employers. Lunge said Vermont Health Connect will then send a bill to employers instructing them how much to deduct from each employee’s pay to cover the cost.
Shumlin said the exchange is “a good first step” to health care reform and the state is “committed to getting the most out of it as we possibly can.”
However, the exchange is “not the silver bullet that will bring our rising and unsustainable health care costs under control in the long run,” he told the small business owners.
Shumlin said he will continue moving the state toward a state-level single-payer health plan in 2017.
“I’m committed to continuing our efforts to bring real health care reform to Vermont,” the governor said. “I believe we have a tremendous opportunity in Vermont to create jobs and economic opportunity by finally bringing costs under control by paying for quality outcomes rather than for quantity, which is what drives the current system.”
Shumlin, who ran for re-election promising such a health care system in Vermont, repeated a familiar promise.
“I’ve committed to you before and I’ll say it again: We will only move forward with a universal, publicly financed system for health care if we succeed in our cost containment goals,” he said. “I believe that we will.”
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