Cover Oregon Offers Tax Credits to Small Employers
Small businesses need not fear – even though Cover Oregon can’t get its SHOP program off the ground, employers can still qualify for a federal tax credit.
Officials at the health insurance exchange also released their 2013 report, including a financial analysis and conclusions reached by an independent auditing firm.
Despite ongoing technology problems, this year alone, up to 29,900 employers could seek coverage through Cover Oregon. They must have fewer than 25 full-time employees, pay average annual wages of less than $50,000, pay at least 50 percent of the premium cost and purchase a Cover Oregon certified health plan from a participating insurance company.
After lowering his small business rates by 14 percent earlier this month, Ralph Prows, CEO and president of Oregon’s Health CO-OP, expects a surge in applications. Better yet, he said, “We gave the same reduction to our existing groups. When was the last time you saw an insurance company roll back its rates by 14 percent?”
Those rates came down after Prows reviewed the health status – the morbidity – of those employers, and realized it was actually lower than projected. “As a co-op, we only use our money to lower premiums and build health programs.”
His members can also take advantage of a one-time $300 savings by participating in three incentive programs to determine their health status. “This is equivalent to a one month premium for most people. It is real cash, and people aren’t just getting silly rewards for flossing their teeth,”
Dawn Bonder, CEO of Oregon’s other co-op, Health Republic, expects more employers to join her ranks later this summer, when their coverage comes up for renewal.
Both plans appear neck and neck when the latest enrollment numbers were released earlier this week by Cover Oregon – Health Republic had 1,991 members, compared to the Health CO-OP with 1,850, while Moda Health still led the pack – with 49,043 lives representing 75 percent , followed by Kaiser, 5,691 lives and Providence, 3088. In all, 65,431 people had purchased a qualified health plan. LINK TO 65,431
But the health insurance leaders disagree about the feasibility of joining the federal exchange if Oregon is unable to work through the problems with its own website.
The federal website is a much better alternative, according to Prows who’s confident he can set up a connection without incurring any major expenses. “We always knew we’d have to ready ourselves for the federal site and have already contracted with a with an IT company that can physically do the connection.”
Unfortunately, Bonder doesn’t have that capability. Her entire $10 million in federal start-up funds has been exhausted, including technology costs, and, she doesn’t have the resources to pay for additional costs.
“We’ve not been in the business long enough to build up extra millions of dollars in reserve,” she says.
There are also no assurances that the state or even federal website can functional when open enrollment begins November 15 for people purchasing coverage for 2015, hich frustrates Bonder. To meet that deadline, the website needs to be operational by the latter half of August.
“There’s absolutely no guarantee that the site can be validated, tested and have the results we want by then. It’s way too close for anyone’s comfort, and I don’t think anyone has strong faith that it can happen. There’s no silver bullet. Right now, it’s like fortune telling. There’s a lot of planning work to be done. Oregon wants to run the marketplace, not just use the technology, but doesn’t have a clear vision about what that means.”
Whatever happens with the exchange, Bonder is confident that Health Republic can weather the storm and become a strong competitor in the health insurance world. By the end of this year, she anticipates meeting her lowest enrollment projections and having 8,000 members -- small employers and individuals who buy a health plan off the exchange because they don’t need a federal tax subsidy.
“Absolutely we’ll survive; we offer insurance in a little different way with good prices, good value and as people become more educated, we’ll have a strong foothold in the market. Right now our prime concern is taking care of our thousands of members,”
Looking ahead to the rate increase filings that are due to the Insurance Division next month, Bonder says she’s seeing high pharmaceutical costs—which she’s heard is true of all carriers. Other than that, there’s no discernable information as of yet about the profile of people who’ve opted for coverage. But like all health insurance executives, that’s definitely on Bonder’s list of priorities in the coming weeks.
Diane can be reached at [email protected].