Small-business solution in medical-insurance marketplace

Affordable Care Act Penalties
April 13, 2017
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Small-business solution in medical-insurance marketplace

With about half of Colorado’s workforce employed by small businesses, there is justifiable concern about the ability of small-business owners to provide their workers with health insurance. Not surprisingly, increasing cost is the biggest concern voiced by employers who want to offer coverage so they can attract and keep employees in an increasingly competitive labor market.

What might surprise you is the number of business owners who are finding solutions that go beyond simply passing more costs on to their workers.

I am overwhelmed by employers in the under-50 employee market contacting me about providing benefits. This is the sector not required by law to offer health insurance to their workers. These business people find they are able to attract and retain better employees with a competitive benefits package.

According to the 2015 Aflac WorkForces Report, a national survey of 2,000 small employers (in this case, up to 100 employees), the number of small employers who are offering major medical coverage nationwide rose 10 percentage points, to 70 percent, in the last year. This is to recruit and retain employees. Nearly half (49 percent) of small-business employees looking for a new job surveyed in the WorkForces report said they would stay with their current job if they were offered a better benefit package.

So, the small employer faces two questions: What do employees want? And how can I control my costs in providing it?

The answer to the first question is choice. Rather than leaving it to their employer to pick their coverage, which often means picking their care provider, employees want to choose for themselves and for their families.

Until the creation of Connect for Health Colorado, the state health-insurance exchange, employers in the under-50 employee market were limited to a single carrier. But now business owners who take their business to the exchange can set their cost at a fixed level and leave the selection of the health-insurance carrier to their employees. Those employers are also saved the trouble of managing payments to multiple insurance carriers by paying a single Connect for Health Colorado invoice.

By using the exchange, employers can fix their contribution toward health insurance while they increase the odds their workers will find more satisfaction in their coverage because they selected it themselves. Ultimately, a small business marketplace that is driven by thousands of individual employee choices will generate downward pressure on monthly premiums and reward carriers who provide value.

Business owners see a bottom-line return on a healthier, happier and more loyal workforce but, in the end, we all benefit.

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