Changes in the way small and mid-sized companies are regulated by the Affordable Care Act could make a substantial difference to more than half of Orange County’s workers and their families — and both they and their employers could benefit.
As of January 1, 2016, the rules for small business groups have changed. Now defined as companies with up to 100 employees, the market that once consisted of independent grocers, auto repair garages, local restaurants, dry cleaners and beauty salons, has grown to encompass larger small companies such as financial services firms, car dealerships and more. Meanwhile, employers are looking to provide a wider range of options and flexible plans to remain competitive. That’s a big win for employees and their families, who are now in direct touch with benefits experts, new technology platforms and online services that help optimize their choices.
Health care reform and government-sponsored exchanges have accelerated consumers’ appetite for choosing the best coverage via a federal or private exchange. The abundance of unstructured plan options is simply overwhelming for small businesses. This can prove costly if either consumers or businesses end up making random decisions about selecting a plan, or worse, not picking one at all. The results are that consumers may be confused, frustrated, unhappy and — perhaps most importantly — improperly covered for their needs. Actually making the best decision without professional counsel or experienced customer service is another thing altogether.
A recent study from the University of Pennsylvania’s Wharton School demonstrates that the “health literacy” of Americans is actually quite low. The report found that only about 14 percent of respondents could correctly answer multiple-choice questions about the four basic components of health insurance plans: deductibles, copays, coinsurance and maximum out-of-pocket costs. Additionally, just 11 percent could navigate the features of a traditional plan to calculate the estimated cost of a four-day stay in the hospital.
For a company of any size, choosing insurance for its employees can be complex. It tends to be even more so for businesses with limited resources that must be aware of all of the different tax laws related to employer coverage, and then factor in the needs of all workers and dependents. As David Chase, health care policy director for the Small Business Majority, a national small business advocacy group, summed it up, “If you’re a small-business owner, you know how to provide your product or service. But when it comes to health insurance, it’s a very foreign concept.”
As Orange County’s more than 100,000 small businesses seek to identify, select and manage health benefits for a diverse workforce and meet ACA requirements, they work closely with professional advisors, such as brokers, to streamline and simplify the entire process.
The bottom line is that the expansion of the small group market has more options, flexibility and opportunity than ever. Today’s marketplace trumpets the virtues of variety, but the reality is that choice works best when it is smartly optimized and benefits professionals can help.
More employees now gain year-round from professional advisors who routinely serve as de facto human resources, personnel or payroll departments. This is particularly true as smaller firms tend to have fewer staff and resources to research, manage and administer plans.
In the end, small-business owners are well-positioned for a win-win situation when it comes to competitive, personalized health insurance. Whether it’s through federal or private exchanges, options are abundant and both employers and employees stand to benefit.
Ron Goldstein, CLU, serves as president and CEO of CHOICE Administrators, which provides health insurance options and provider access to small businesses and their employees. He also created, and currently manages, America’s longest-standing, state-approved exchange, CaliforniaChoice. For additional information, please visit www.mycalchoice.com