A recent study found that small Iowa businesses are less knowledgeable than larger businesses about the Affordable Care Act (ACA) and skeptical about features of the ACA, such as insurance exchanges and tax credits, designed to help them implement the health reform law. The study was conducted by the University of Iowa Public Policy Center (PPC) in collaboration with the Iowa Department of Public Health, the state Health Insurance Marketplace Interagency Workgroup on Health Care Reform, and the UI College of Public Health.
In addition to the individual Health Insurance Marketplace (HIM) for consumers established by the ACA, the law established Marketplaces to assist small businesses in providing health insurance to employees. The Small-Business Health Options Program (SHOP) exchanges (or Marketplaces as they are now called) are designed to offer small businesses a web-based portal to compare insurance offerings on price, coverage, and quality. Businesses can decide how much to contribute to employee premiums and the Marketplaces handle premium collection and other administrative functions.
To encourage small businesses to begin or continue offering health insurance to employees, tax credits worth up to 35% (in some cases up to 50%) of the cost of insurance premiums were made available to companies with fewer than 50 full-time employees. Starting in 2014, those tax credits are only available for businesses purchasing employee coverage via SHOP Marketplaces.
Yet despite these incentives, the study found that small businesses are not comfortable making decisions and purchasing the coverage online, and prefer to have an agent or broker involved in their policy purchases. In November 2013, the Federal government announced a delay in online enrollment until November 2014, leaving agents or brokers as the only option for employers to purchase SHOP coverage during the first open enrollment period. Furthermore, employers indicated that employee choice is very important to them, an option that had already been delayed by the Federal government in the SHOP Marketplace. The study also showed that they support a moderate number of plan choices with a guided system, based on a series of targeted questions.
“Our findings corroborate anecdotal evidence that Iowa businesses, small businesses in particular, are skeptical about the ACA and want help in navigating the potential choices facing them,” says lead author Dan Shane, assistant professor of health management and policy. “Survey results further suggest insurance agents/brokers could play a pivotal role in helping guide small businesses in this new environment.”
Primary investigators on the report are Peter Damiano, Suzanne Bentler, and Shane.
To read the full report, click here.