Survey Assesses Small Business Exchange Enrollments

May 16, 2014

A new survey finds that many small businesses in Vermont are not signing up for the health care exchange.

The Ethan Allen Institute and Vermont Business Magazine poll of small businesses with 50 or fewer employees finds that nearly a third have dropped their insurance plans since the state health care exchange — Vermont Health Connect — began. According to Vermont Business Magazine, of the companies that responded, 45 percent will participate in the exchange. Two percent had not offered insurance in 2013, but would enroll in the exchange in 2014.  36.5 percent of companies that offered health insurance in 2013 dropped coverage in 2014.
The survey included written responses that indicate companies are not signing up with Vermont Health Connect due to its cost, complexities, or website frustrations.

Rob Roper is president of the conservative Ethan Allen Institute. He believes there is still a lot of uncertainty over the exchange.  “The uncertainty is caused by the fact that nobody knows exactly where this is going. Is it going to be a temporary thing for 2015 and 2016 and then in 2017 they’ll be put into a single payer health care, in which all of this becomes moot?  Is it easier for your employees to keep them on under your company-provided insurance or is it going to be better for your employees to put them onto the exchange as individuals?”

Roper believes that was a goal of Act 48, the enabling legislation to create the exchange. He believes the incentives built into the system tend to drive employees off company-provided insurance and into the exchange as individuals.  “They want to divorce health insurance from business. This whole employer-provided health insurance system, they’re trying to change the culture. In some ways I think that this is a very good idea. Because why should your employment status, or what should your employment status, have to do with whether or not you have health insurance or not? You should be able to take health insurance from one employer to another. It should be tied to the individual. Now they want this to be tied to the state as well, which I don’t necessarily agree with.”

Due to earlier technical problems with the exchange, businesses have been allowed to sign up directly with insurance carriers, and will be allowed to do so until the end of 2016. Because they are not contacting the exchange, Vermont Health Care Reform Director Robin Lunge says the state does not have comprehensive data on business enrollments. But she’s not surprised that many small businesses are not signing up.  “For some very small businesses offering health insurance becomes basically a second full-time job. And there are many Vermont employers who expressed the desire to have an affordable health coverage option for their employees that wasn’t reliant on the employer. So as we expected many Vermonters have moved from small group coverage into the individual market. But we don’t think that’s necessarily a bad thing.”

Lunge noted that individual Vermonters with incomes below a certain level are eligible for tax credits that would not be available in group coverage.

The survey was sent to 3,100 businesses, and 500 responded.