Health Reform that Works for Small Businesses Presentation by Terry Gardiner Small Business Majority for Alliance for Health Reform September 8, 2010

Still an Employer Based Health System CBO health reform coverage projections (Millions of non-elderly people) Change o Employers 159M (-3)56% o Medicaid 51 (+16)18% o Nongroup 25 (-5) 9% o Exchanges 24 (+24) 9% o Uninsured 22 (-31) 8% Health reform success depends on the success of employer health coverage o Affordability – Cost containment and delivery system reform o Exchanges that work for employers

Small Business Landscape 22 million self-employed entrepreneurs nationally o 28% of self-employed entrepreneurs are uninsured 5.9 million employers with fewer than 100 employees nationally employ 43 M o 80% (4.8 M) have fewer than 10 employees o 54% (2.6 M) of employers with fewer than 10 employees do not offer health coverage Most small businesses are very small and lack sophisticated HR departments o Average employer in Connecticut exchange has 8 employees

Small Business Tax Credits Our report: More than 4 million businesses are eligible (83.7% of all businesses); 1.2 million businesses eligible for the maximum credit

Small Business Tax Credits $ 4 Billion annually for small employer tax credit Tax credit available through exchange in 2014 Blue Cross Blue Shield of Kansas City actively and creatively marketed the new small business tax credit o Over 5,000 enrollees from new small business customers with less than 50 employees in the last three months

Small Employer Health Coverage Choices in 2014 Purchase health coverage through the exchange Purchase health coverage in the outside market Maintain a “grandfathered” health plan Do not offer health coverage o Employers with 50 employees or fewer (96% of employers) are exempt from any shared responsibility requirements

Small Business Needs - Exchange Provide affordable health plans o Maintain low administrative costs with large market share o Attract insurers to the exchange and create incentives for price/value competition among insurers o OPM is required to provide at least two “multi-state plans” o Create incentives for participants to select lower-cost plans Federal Employees Health Benefits plan, CalPERS for state employees and Wisconsin State Employees Health Plan have created consumer incentives Keep annual premiums stable

Small Business Needs – Exchange Offer choice of competitive plans to employees Single point of entry for small employer o All necessary information for employer and employees to make decisions on coverage o One application o One premium payment o One source for enrollment changes o Qualification and calculation of the small business tax credit o Provide additional “HR” services such as Cobra administration, Section 125 service, HAS/FSA/HRA

Effective Outreach & Education Direct contact – only half of employers belong to any business group o IRS postcard succeeded in making small business aware of the tax credit Trusted voices of peers – historical sources: o B rokers, business groups, business media Navigators in ACA can work for employers o Case Study: Massachusetts Fishing Partnership Health Plan Uninsured rate dropped from 43% to 13%

Exchange – Key Issues for Employers Active vs. passive (can the exchange negotiate?) Transparent design/full-disclosure on plans, costs Combine small group and individual exchanges Regional exchanges Expanding exchange to large firms in 2017 Incorporation of wellness and prevention programs Driving delivery system reform Administrative simplicity: billing, payment, web, etc. Effective education and outreach

Info for Small Businesses Frequently asked questions: o Small business healthcare reform summary: o For more information: o (866) or