1. Your Bottom Line: What Health Reform Means For Wisconsin Small Businesses Jessica Stone Small Business Majority

2. About Small Business Majority Public policy advocacy organization – founded and run by small business owners National – based in California – 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 5 years – top issue in all of our research

3. Small businesses struggling with costs Soaring cost of health insurance – especially for small businesses – 54% of businesses <10 employees don’t offer (Kaiser study) 28% self-employed: not covered Small firms pay 18% more than large businesses Our national study: Small business health costs will more than double over the next 10 years – $2.4 trillion total

4. Small businesses struggling with costs Our opinion surveys: 86% of small businesses don’t offer because of cost; 72% of those who do offer say they are struggling to do so

5. The new federal law Builds on and seeks to fix our existing healthcare system Aims to rein in healthcare costs; reduces deficit by over $100B by 2020; by $1.3T by 2030 (according to the Congressional Budget Office) Implementation is primarily the responsibility of the states – essential to have small business input Important immediate benefits – other key provisions to be implemented over the next 4 years

6. Immediate Consumer Protections Bans health plans from dropping insurance coverage when an individual gets sick (Sept. 23, 2010) Insurers will no longer be able to deny coverage for patients with pre-existing conditions (2010 for kids, 2014 for adults) Ban on lifetime caps that rescind coverage when people get sick (Sept. 23, 2010) Adult children under 26 can stay on their parents’ plan (Sept. 23, 2010) First-dollar coverage for preventative care for all new plans (Sept. 23, 2010)

7. 3 Key provisions of health reform for small businesses Provides immediate tax credits for most small businesses ($40 billion in credits by 2019) Provides immediate access to a Preexisting Condition Insurance Plan for the self-employed Establishes a competitive marketplace for small businesses and the self-employed

8. I. Small business tax credits Our report: 86,100 Wisconsin small businesses are eligible (86.8% of all businesses); 25,800 businesses eligible for the maximum credit

9. II. Preexisting Condition Insurance Plan (formerly high-risk pools) Available to individuals -- incl. self-employed Takes effect immediately Eligibility: Individuals who have been uninsured for six months and have been denied coverage for a preexisting condition or have a letter from a physician stating they have a preexisting condition. Plans = lower premiums due to federal funding ($5 billion over 5 years) Available until full implementation in 2014 (no gap in coverage)

10. PCIP in Wisconsin Run by the state Health Insurance Risk- Sharing Plan (HIRSP) www.hirsp.org

11. Other immediate changes Grants to study small employer wellness programs $9M granted in 2011 Reduce the risk of chronic disease among employees and their families through evidence-based workplace health interventions and promising practices. Promote sustainable and replicable workplace health activities. Promote peer-to-peer healthy business mentoring. Medical Loss Ratio or the “80/20 rule” (2011) and Rate Review Increased access to care - community health centers (2011)

12. III. State Health Insurance Exchanges: Coming in 2014 Large marketplace to shop for health coverage o Purchasing pool to increase buying power and reduce administrative costs o Small businesses with fewer than 100 workers eligible Private insurance plans will compete o Improved competition will increase employer choice o Exchange will negotiate with insurers on behalf of small businesses to ensure higher quality and lower costs RAND Study o Exchanges will expand coverage to 85.9% of small business employees, up from 60.4% today, an increase of 10.5 million workers

13. State Health Insurance Exchange One-stop shop web portal Small Business Exchange INSURANCE PLANS EXCHANGE Choice Comparison Billing Tax Credits SMALL BUSINESSES o Compare plans and get detailed information about price, quality and service o Plans organized by category: bronze, silver, gold, platinum o Calculator to compare costs across plan options o Streamlined billing process

14. State Insurance Exchange: Other Benefits Many small business workers and self-employed entrepreneurs will receive affordability tax credits towards their premiums o Up to 400% of federal poverty level (approx. $90,000 for a family of four) Incentives for administrative efficiency and modernization Expanded coverage and individual responsibility requirement – reduce hidden tax

15. State insurance exchange States determine whether to keep the individual and small group markets separate or merge them Insurance will still be sold outside exchange Members of Congress must use the exchange

16. CO-OP Plans: More choice $3.8B invested in new CO-OP health plans Plans must operate with a strong consumer focus, profits must be used to further its mission through lower premiums, improved benefits, or improved quality of care A team of small business, community and health insurance professionals with an 11-member board formed the Common Ground Healthcare Cooperative in the Milwaukee, Wisconsin region. HHS awarded the new WI CO-OP a $56.4 million loan. http://www.commongroundhealthcare.org/

17. What does this all mean for your bottom line? Changes in average employer contribution per person covered

18. Exchange – key issues Active vs. passive (can the exchange negotiate?) Regional exchanges Role of brokers Expanding exchange to large firms in 2017 Incorporation of wellness and prevention programs Administrative/design issues: billing, payment, web, etc. Effective education and outreach

19. Businesses with fewer than 50 workers – 96% of all businesses – are exempt from any requirement to offer insurance Shared responsibility

20. Resources National HHS website: www.healthcare.govwww.healthcare.gov Our website: www.smallbusinessmajority.orgwww.smallbusinessmajority.org o “What’s in Healthcare Reform for Small Businesses” o Detailed FAQ o Tax credit calculator

21. Join Our Network Erica Dowell, Network Coordinator Email: edowell@smallbusinessmajority.org Direct: (202) 535-3244 Connect with us! @SmlBizMajority Small Business Majority Ways to Get Involved: Contact Receive a monthly newsletter Share your story for media requests Letters to the editor/Op-eds State events/Roundtables Fly-ins Webinars for business organizations