Presentation by Terry Gardiner Small Business Majority National Academy for State Health Policy February 16, 2011 Exchanges – Attracting Small Businesses

Public policy advocacy organization – founded and run by small business owners National – based in Bay Area – with offices in Sacramento, Washington, DC and New York Research and advocacy on issues of top importance to small businesses (<100 employees) and the self-employed Very focused on healthcare over the past 3 years – top issue in all of our research About Small Business Majority

SBM Exchange Model Bill Built on foundation of NAIC Model Bill We conducted focus groups, listening tours and webinars to get small business owner feedback about exchanges We are active participants with other business and policy groups working on exchange designs Policy choices and additions based on our research that serve small businesses

SBM Model Bill: Lessons Learned Utah Exchange Employers Massachusetts Connector20094,200 Employers HealthPass, NY19994,000 Employers CBIA, CT19956,000 Employers PacAdvantage, CA ,000 Employers COSE, OH198311,000 Employers Federal Employees (FEHBP) Million People We studied and interviewed representatives from exchanges to understand the successes, failures and lessons learned

Only half of employers belong to a business group Trusted Advisors – their brokers, accountants, peers Communication – business press, business groups, trade groups Navigators need to be trusted messengers Effective Outreach & Education

Purchase health coverage through the exchange Purchase health coverage in the outside market Maintain a “grandfathered” health plan Do not offer health coverage Employer Health Coverage Choices Will the exchange offer “value” – lower price; better coverage; better services?

An independent exchange will create the greatest trust and support “Active purchaser” model can provide value for employers and employees “Employee choice” model is needed to differentiate from outside market and drive consumer choice and value Trust, Value and Choice

Meeting the Needs of Employers 5.9 million employers with fewer than 100 employees employ 43 M nationally 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

All necessary information for employer and employees to make decisions on coverage One application One premium payment & detailed accounting One source for enrollment changes Single Point of Entry for Employers

Qualification and calculation of the small business tax credit; state programs Coverage of out-of-state employees Coordinating coverage of Medicare-eligible employees Provides additional “HR” services such as Cobra administration, Section 125 service, HSA/FSA/HRA Full Array of Services

Recognize different role of brokers for individual and small group markets Brokers will have ongoing role with small business selling other products Initial launch and reception has proven critical for both employers and brokers Balancing broker compensation and services with competitive cost to employers will be challenging Successful models train and support brokers on ongoing basis Brokers Working for Exchanges not Against Brokers Working for Exchanges not Against

Defined contribution option – NY, Utah & Montana Contributions by multiple employers for part-time workers – Utah Other Measures to Attract Business “Free choice” voucher Support of larger businesses

Frequently asked questions: Small business healthcare reform summary: biz.pdf Small Business Resources For more information: Terry Gardiner National Policy Director