Cover Oregon Ignores Small Employers, Tax Credits in Jeopardy

Last October, the exchange gave $604,000 in grants to business associations as a way of educating small employers about the SHOP program so they could qualify for tax credits.

With all the discussion about the beleaguered Cover Oregon website, small employers have fallen off the radar screen. They had expected to qualify for tax credits this year, worth up to 50 percent of their health insurance costs. Now, faced with a tumultuous roll-out, the small business exchange appears to be on life support.

Employers are feeling dismayed. Last year, before enactment of the Affordable Care Act, they were eligible for similar tax credits by offering health insurance to their employees. But, now, those credits are tied to the exchanges.

From Cover Oregon’s perspective, there’s been discussion among letting employers purchase coverage directly from insurance companies – as they do now – but still receive tax credits by working alongside their CPA. But, thus far, nothing appears to have surfaced.

Cover Oregon officials told legislators at a bare minimum, that 29,900 small employers in Oregon would seek coverage using the exchange this year, setting a high bar of 89,700 employers. Now that the road map has changed, and insurance agents, who’ve been left in the dark, are struggling to figure out what’s going on.

“We’ve heard nothing official about the status of the small business exchange, it appears as if it’s dead in Oregon,” said Rick Skayhan with Leonard Adams Insurance. “The magic of that program was that everyone could choose their own health plan and provider network, but that appears to be lost. If Cover Oregon can’t execute the individual option, there’s no flipping way they can do the small business exchange."

For the time being, there are no immediate plans to bring up the small business exchange, Michael Cox, spokesman, told The Lund Report: “Our IT focus for the remainder of open enrollment is on making improvements to the partner portal.  Our agreement with Oracle for that time defines their work as providing maintenance and fixes for the system we have.  We do not have an official target date to launch the SHOP functionality.  We are currently undertaking an alternatives analysis and will convene a group that includes private sector technology experts to advice on the best options to move forward with the next phase of the website."

Thus far, the Oregon Health Authority and Cover Oregon have paid Oracle around $134 million, and are withholding $25.6 million of the $69.5 million Oracle has claimed for technology development work from November 2013 through February 28, 2014, Cox said.

Feds May Extend Small Business Exchange 

At the federal level a decision was made Wednesday to not extend the deadline beyond March 31 when individuals can qualify for tax credit by purchasing coverage through a health insurance exchange.

But there’s a glimmer of hope for small businesses.

U.S. Rep. Carol Shea-Porter, D-N.H. has introduced legislation that would make the small employer tax credit available for a longer period of time so employer could cover more of their employees, according to an article in Insurance News Net, an online website. Her legislation, known as the Small Business Tax Credit Accessibility Act (H.R. 4128), follows a letter she sent to President Obama recommending the tax credit be expanded.

"Improving health-insurance options for small businesses was a key goal of the Affordable Care Act, and we must keep working to help smaller businesses afford health coverage," according to Shea-Porter.

Grants Promoted Small Business Exchange 

Business associations across the state received grants totaling more than $604,000 last October to help promote the small business exchange to small employers. In the press release announcing the grants last October, Amy Fauver, chief communication officer, said these grants were intended to “give businesses an easy, cost effective way to offer unprecedented choice to their employees.”

It’s still unknown why Cover Oregon officials -- who knew what was going on behind the scenes – still went ahead and gave out these grants.

The press release made it quite clear that these grant dollars were intended to help small businesses secure tax credits – only available through the exchange – and provide their employees with a broad selection of easy-to-compare medical and dental plan options, informing employers that Cover Oregon would ease their administrative burden and costs, telling them they’d only receive a single monthly bill from them no matter despite the number of different insurance plans chosen by their employees.

The Lund Report contacted several of the business associations, asking them how they’d spent those dollars. Here’s what they had to say:

The Main Street Alliance, a Portland-based small business association, used its $100,000 to hire a staff person to hold forums and educate its business members about the Affordable Care Act. Spokesperson Stephen Michael called that training invaluable, saying there are still a lot of myths about the legislation. His sentiment was echoed by Gale Castillo, president of the Hispanic Metropolitan Chamber. Some people who attended the forums didn’t understand, for example, whether insurance agents would charge them an upfront fee for enrollment, rather than receive a commission from the insurer.

"The Main Street Alliance of Oregon has been and will continue to travel all over Oregon educating small business owners about the Affordable Care Act, SHOP and Cover Oregon. We've been engaging with thousands of small businesses one-on-one, in small groups and as a part of larger, regional business education forums. We've collected and highlighted small business owners' stories to inform the work Cover Oregon is doing to produce the best product for our state's small businesses. We will continue to work with Cover Oregon and other community partners to educate and ensure that the Oregon small business community get unbiased facts about the changes in the health care law, and how their businesses and communities will be affected," Michael said. 

Another recipient of grant dollars was the Oregon Trucking Association, which represents more than 7,500 small trucking companies, many of them owner-operators who work solo.

While the association was told it could receive up to $99,000, those dollars were handed out on a monthly basis, and, thus far, has only spent $16,000 said Debra Dunn, its executive director.

Besides contacting every company, the association has distributed posters, held several meetings to discuss the Affordable Care Act and referred members to insurance agents for more details.

The other associations receiving grants included:

. Small Business Majority, Statewide

. Oregon Native American Chamber, Statewide

. Oregon Microenterprise Network, Statewide

. Oregon Business Association, Statewide

. Marion-Polk County Medical Society, Marion and Polk Counties

. Keizer Chamber of Commerce, Marion and Polk Counties, and

. Klamath Chamber of Commerce, Klamath County

Christen McCurdy also contributed to this article and can be reached at [email protected]. Diane can be reached at [email protected].

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