Employer engagement needed to shape Idaho’s exchange

Health care remains at the forefront of everyone’s minds these days and Idaho is no exception. Idaho employers of all sizes, and from all industries, should listen to the debates in the 2012 legislative session relating to the anticipated health insurance exchange, as the exchange will have an impact on all.

The Patient Protection and Affordable Care Act (PPACA) – the federal health care reform law enacted in March 2010 – mandates that states either establish their own state health insurance exchange by Jan. 1, 2014, or participate in a yet-to-be-established federal exchange. Idaho has elected to establish its own exchange and has been awarded a $20.4 million grant for the first phase of the implementation. In early January, Gov. Otter stated that he wants to “work with the Legislature to find Idaho solutions to Idaho’s health care issues and minimize the federal government’s footprint on how Idahoans obtain their insurance.”

However, last week he informed members of the Idaho Press Club that the “chances are very good that we are not going to have a state-based exchange” before the certification deadline of Jan. 1, 2013 – creating uncertainty about the future of health care coverage for individuals and industry in Idaho.

The state exchanges are expected to be a marketplace for individuals and small employers to purchase health insurance coverage. These exchanges will also be open to private and non-profit insurance carriers that offer health plans that meet minimum quality requirements and provide coverage for “essential health benefits.” According to Bill Deal, director of the Idaho Department of Insurance, small business owners throughout the state support an exchange concept due to increased flexibility and options.

If you’re a small business owner, what does this mean for you? Under PPACA, employers with up to 100 employees in the preceding year may purchase health coverage through the exchange. Under PPACA, states have the option to provide an exchange through a governmental entity, a quasi-governmental entity or a private entity. According to the website for the exchange, Idaho has chosen to establish a “quasi-governmental entity that will not rely on state or federal dollars to run the exchange.” This new quasi-governmental entity will be responsible for the design and implementation of the exchange.

Additionally, in 2017, Idaho may choose to open the exchange to large employers.

Idaho employers of all sizes have a vested interest in Idaho’s exchange. First, decisions made by the exchange will affect its ability to offer affordable, competitive coverage and the rates for coverage. It will be important that the exchange maintain a healthy risk pool and manage the costs coverage.

Decisions made by the exchange will affect whether it provides attractive services to employers, incenting employers to purchase coverage through the exchange. How the exchange offers products to employers and whether employers are permitted to provide input on plan designs will have an impact on whether employers participate in the exchange. The exchange will also be more attractive to employers if it provides additional administrative services, such as eligibility verification and COBRA administration, reducing administrative costs for small businesses. The type and manner of customer service provided directly to employers will also be important to the business community.

Large employers will also be directly affected by exchange decisions, even though they will not purchase coverage for their employees through the exchange – at least not initially. According to other provisions of PPACA, employers with 50 or more full-time employees will be subject to a “shared responsibility” penalty if their employees purchase coverage through the exchange and receive a premium tax credit or cost-share reduction – two forms of premium assistance that will be provided through the exchange.

Accordingly, employers with at least 50 employees have a vested interest in the exchange’s adjudication of premium tax credits and cost-sharing reductions. There are two verification methods available to state exchanges: a case-by-case review or a statewide database populated with large employer plan data. Idaho’s exchange will be determining this adjudication process that will directly impact large employers, both in process and pocket book.

Per PPACA, the exchange is to be prepared for certification review by the federal government on Jan. 1, 2013. Idaho state officials have recognized that, based on the current progress of the exchange implementation, time is working against the state. The state has requested an implementation extension deadline to Jan. 1, 2015.

Regardless of the outcome of the requested extension, there is much work to accomplish in a short period of time. This work will shape the future of industry in Idaho, as health care is a significant expense and a workplace priority for most business owners. Employers must engage now.

Anne Wilde is an HR and employee benefits compliance attorney with The HR & Benefits Advisor, PLLC in Boise. She advises employers on a myriad of employee-related compliance obligations and HR strategy. Her employee benefits practice focuses on group health plans. She may be reached at anne@TheHRandBenefitsAdvisor.com or followed on Twitter: @Anne_Wilde.

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One Response to “Employer engagement needed to shape Idaho’s exchange”

1. Boise Bobb Says:
   January 31st, 2012 at 11:16 am

   This is a good article and it clearly lays out what is going on, as far as it goes. But why not tell people what the PPACA really is? It’s OBAMACARE, right? Nobody knows PPACA, but they do know Obamacare. And don’t you need to talk about the very strong likelihood that the Republicans are going to retake the White House and the Congress and that Obamacare will be REPEALED so all this is mute?

   It makes me think you are just trying to gin up more business rather than inform your readers, and that’s too bad because I hope that’s not really the case, and this is otherwise a really good article. Please be a bit more transparent next time and it will be a home run.