Snapshot of Vermont’s Small Group Market
Apr 02, 2013 by MVP Health Care
There’s a big push to educate Vermonters about their options for health insurance through Vermont Health Connect, a state-run health benefits exchange. Starting in 2014, Vermont Health Connect will be the only insurance marketplace for individuals and small businesses.1 An estimated 118,000 individuals and employees from the small group market will be served by the health benefits exchange in the first year.
Small Business Health Care Trends
As the Department of Vermont Health Access (DVHA) moves forward with health exchange planning, they have connected with stakeholders in the small business community to help understand the needs of small businesses in Vermont. The Vermont Small Business Study for DVHA provides a snapshot of the small group landscape, highlighting the importance of these issues.
Among responding businesses, 22 percent had nine or fewer employees, 23 percent had 10-24 employees, 25 percent had 25-49 employees, and 20 percent had 50-99 employees. Ninety-two percent of these businesses had at least one full-time employee and 67 percent had at least one part-time employee.
The majority (74 percent) of responding businesses offered health insurance to at least some of their employees, with 30 percent offering coverage to all employees and 44 percent offering coverage only to full-time employees. Among those who do not provide coverage for employees, 85 percent said the major reason is that it is too expensive for their business.
Among employers offering coverage:
- 94 percent also offer coverage to employees’ families
- Most (72 percent) offer a selection of plans from the same insurer, only 3 percent offer a selection of plans from multiple insurers
- 51 percent offer a comprehensive health insurance plan, 46 percent offer a high-deductible plan and 4 percent offer catastrophic coverage only
- 34 percent offer Health Savings Accounts and 51 percent of those businesses contribute some money to employees’ HSAs
- 39 percent cover 70 percent or more of their employees’ premium costs
- Almost all (94 percent) businesses reported seeing insurance premiums increase within the past three years. Of those businesses:
49 percent shared the increased cost with employees
23 percent covered the cost increase
14 percent passed the entire increase onto employees
9 percent switched to an insurance plan that was less expensive
There’s some skepticism about the costs of health care reform and how it will impact small businesses. For example, new requirements for essential health benefits (10 categories of health care services that must be covered) will provide uniformity and greater coverage, but there are concerns it may increase cost.
Looking even further ahead, the state plans to move to universal health care coverage for all residents under Green Mountain Care in 2017. As this plan continues to unfold, the state and insurers need to continue to innovate and find ways to make health insurance more affordable for small businesses and their employees.
Want to learn more? Read about the New York, Vermont and New Hampshire Health Exchange Status.
1Vermont employers with up to 50 employees will be eligible to buy plans through Vermont Health Connect, and this expands to employers with up to 100 employees in 2016.
Source: Task 9 Small Business Study Report, prepared for Vermont Office of Health Access Planning for Vermont’s Health